Per unit price or other underlying value of the transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

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(4)

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Proposed maximum aggregate value of the transaction:

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(5)

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Total fee paid:

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☐

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

To elect the eleven directors named in the Proxy Statement, each to serve for a term of one year or
until his or her successor is elected and qualified;

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To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting
firm of the Company for 2020;

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To approve, by non-binding vote, the compensation of the Company’s Named Executive Officers;

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To consider and vote upon two shareholder proposals if properly presented at the Annual Meeting; and

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To transact such other business as may properly come before the Annual Meeting.

Only shareholders of record at the close of business on March 20, 2020, are entitled to notice of, and to vote
at, the Annual Meeting.

For your convenience, you may attend the Annual Meeting in person or listen via a live audio-only webcast. You
may listen to the live audio-only webcast of the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/UNP2020 when you enter your 16-digit control number included on your notice of Internet availability of proxy materials, on your
proxy card or on the instructions that accompanied your proxy materials. Instructions on how to listen to the Annual Meeting via live audio-only webcast are posted at www.virtualshareholdermeeting.com/UNP2020.

As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the
Annual Meeting may be held solely by means of remote communication. If we decide to hold the Annual Meeting solely by means of remote communication, the meeting will occur at the above date and time via live audio webcast, and you or your
proxyholder will be able to participate, vote and examine our shareholder list by visitng the www.virtualshareholdermeeting.com/UNP2020 website and using your 16-digit control number. We will announce any decision to hold the meeting solely by
means of remote communication in advance, and details on how to participate in and vote during will be available at https://www.up.com/investors.

Your vote is very important. New York Stock Exchange rules provide that if your shares are held by a broker,
your broker will NOT be able to vote your shares on most matters presented at the Annual Meeting, including the election of directors, unless you provide voting instructions to your broker. We strongly encourage you to submit your proxy card to
your broker or utilize your broker’s telephone or internet voting services (if available) and exercise your right to vote as a shareholder.

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain
all of the information that you should consider. You should read the entire Proxy Statement carefully before voting.

Even if you plan to attend the 2020 Annual Meeting of Shareholders in person*, we encourage you to vote in advance of the meeting. You may vote using one of the following voting methods. Make sure to have your proxy card or voting instruction form in hand and follow the instructions. Participants in Union Pacific’s thrift
and retirement plans who hold Company stock through such plans will receive
separate voting instructions. You can vote in one of three ways:RECORD HOLDERS

As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the Annual Meeting may be
held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance, and details on how to participate, including how to vote, will be available at https://www.up.com/investors.

In 2019, the Company produced record financial results and finished the year with improvements in service
reliability and productivity despite significant weather events, including harsh winter conditions in the Midwest and Pacific Northwest that were followed by widespread flooding across the central and southern portions of our network. We
continued implementation of Unified Plan 2020, the Company’s plan for operating a safe, reliable and efficient railroad by increasing reliability of our service product, reducing variability in network operations and improving resource
utilization costs. Highlights of the Company’s 2019 operational and financial performance include:

✔

Record financial performance, with earnings per share of $8.38, up 6% from 2018

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An all-time record operating ratio for 2019 of 60.6%, improving 2.1 points from 2018’s 62.7%

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Operating income of $8.6 billion, flat with 2018 despite the 6% carload decline

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Substantial improvement in key performance indicators year-over-year. For example, improvement in asset utilization and fewer car
classifications led to a 17% improvement in freight car terminal dwell and a 6% improvement in freight car velocity

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13% improvement in locomotive productivity and 2% improvement in work force productivity

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Total shareholder return was 33.7% for 2019, compared with 31.5% for the S&P 500

We were encouraged with the results of our say-on-pay vote at our 2019 Annual Meeting of Shareholders as we
received shareholder support of 95% for our executive compensation program. We believe that the changes we made to our executive compensation program in 2019 - eliminating the use of retention stock so that long term incentive awards in 2019 for
executives consisted of 60% performance stock units and 40% stock options and adopting a formal recoupment of incentive compensation policy - together with the revisions we made in prior years benefit shareholders and continue to align with our
strategy and pay-for-performance philosophy.

In 2019, as part of our regular shareholder engagement, management participated in 15 investor conferences,
numerous in-person investor meetings, and hosted more than 260 conference calls with analysts and investors.

Executive Compensation Highlights

✔

In 2019 our executives participated for the second year in our formula-based annual incentive plan where eighty percent (80%) of
annual incentive cash bonuses paid to our executives, including the named executive officers (NEOs), was based on the attainment of specified Company financial performance goals (operating income (40%) and operating ratio (40%)), and
the remaining (20%) was based on the Company’s performance against pre-established business objectives and individual executive performance

✔

Under our formula-based annual incentive plan, performance for 2019 resulted in an overall payout of 41% of target for four of the
five NEOs after the Compensation and Benefits Committee’s adjustment for weather related expenses as set forth on page 50 of the Compensation Discussion and Analysis (CD&A)

✔

Upon recommendation of the Compensation and Benefits Committee, our Chief Operating Officer, Mr. Vena, received an annual incentive
bonus for 2019 at 150% of target based upon superior performance implementing Unified Plan 2020

✔

Based on our three-year average return on invested capital (ROIC) of 15.0% and our relative Operating Income Growth at the 58th percentile, performance stock units for the three-year performance period (2017-2019) ending in 2019 vested at 200% of target

✔

The Compensation and Benefits Committee also recommended, and the Board approved, vesting of the first tranche of Mr. Vena’s 2019
equity award at 100% of target

✔

The compensation earned in 2019 by Mr. Fritz and the other NEOs, as described in the CD&A section of this Proxy Statement,
reflects our policy of having a significant portion of our executives’ compensation tied to annual and long-term Company performance

✔

In 2019, 74% of the target compensation opportunity provided to Mr. Fritz and 65% of the target compensation opportunity provided to
the rest of the NEOs was in the form of long-term incentive equity awards

Performance stock unit awards granted in 2019 are subject to a 3-year average ROIC and a relative Operating Income Growth modifier
(+/-25% of the award earned based on ROIC, depending on our Operating Income Growth compared to companies in the S&P 500 Industrials Index)

✔

The Compensation and Benefits Committee also approved a formalized policy for recoupment of incentive compensation described on page
44 of the CD&A which became effective January 1, 2020

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 2020

INFORMATION ABOUT THE ANNUAL MEETING, VOTING AND PROXIES

Important Notice Regarding the Availability of Proxy
Materials for the Shareholder Meeting to Be Held on May 14, 2020

This Proxy Statement and our 2019 Annual Report on Form 10-K are available at www.up.com under the
“Investors” caption link by selecting “Annual Reports/Form 10-Ks and Proxy Statements” www.up.com/investors/annuals/index/shtml.

Date, Time and Place of Meeting

This Proxy Statement is being furnished to shareholders of Union Pacific Corporation (the Company) in
connection with the solicitation of proxies by the Board of Directors of the Company (the Board) for use in voting at the Annual Meeting of Shareholders or any adjournment or postponement thereof (the Annual Meeting). The Annual Meeting will be
held on Thursday, May 14, 2020, at 8:00 A.M., Central Daylight Time, at the CHI Health Center, 455 North 10th Street, Room 204, Omaha, Nebraska. This Proxy Statement and the accompanying proxy card are being distributed and made available to
shareholders of the Company on or about April 3, 2020.

As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the
Annual Meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance, and details on how to participate, including how to vote and how to examine our stockholders list, will
be available at https://www.up.com/investors.

Record Date, Outstanding Shares and Quorum

Only holders of record of the Company’s common stock at the close of business on March 20, 2020 (the Record
Date), will be entitled to vote at the Annual Meeting. On the Record Date, we had 678,553,915 shares of common stock outstanding and entitled to vote. If a majority of the shares outstanding on the Record Date are present and entitled to vote on
any matter at the Annual Meeting, we will have a quorum at the Annual Meeting. Any shares represented by proxies that are marked for, against or to abstain from voting on a proposal will be counted as present for the purpose of determining
whether there is a quorum.

Internet Availability of Proxy Materials

Again this year, we are using the Securities and Exchange Commission (SEC) rule that allows companies to
furnish their proxy materials over the Internet. As a result, we are mailing a Notice of Internet Availability of Proxy Materials instead of a paper copy of the proxy materials. All shareholders receiving the notice will have the ability to
access the proxy materials over the Internet and may request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice of
Internet Availability of Proxy Materials. In addition, the notice contains information on how you may request access to proxy materials in printed form by mail or electronically on an ongoing basis.

Your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card will contain
instructions on how to:

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View our proxy materials for the Annual Meeting on the Internet; and

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Instruct us to send our future proxy materials to you electronically by email or the Internet.

Our proxy materials will be available during the voting period at www.proxyvote.com. From this website,
you also will be able to vote prior to the Annual Meeting. To access this website, you will need your 16-digit control number included on your notice of Internet availability of proxy materials, on your proxy card or on the instructions that
accompanied your proxy materials.

Your Notice of Internet Availability, proxy card or voting instruction card will contain instructions on how
you may request proxy materials electronically on an ongoing basis. Choosing to access your future proxy materials electronically will help us conserve natural resources and reduce the costs of distributing our proxy materials.

Voting Rights

Holders of our common stock are entitled to one vote for each full share held as of the Record Date.

Under Proposal Number 1, directors will be elected by a majority of the votes cast by the shares of common
stock present at the Annual Meeting (either in person or by proxy) and entitled to vote on the election of directors, which means that a nominee will be elected if he or she receives more “for” votes than “against” votes. Pursuant to Section 9 of
Article I of the Company’s By-Laws and applicable laws of the State of Utah, a nominee who does not receive more “for” votes than “against” votes will be elected to a shortened term expiring on the earlier of: (i) 90 days after the day on which
the Company certifies the voting results; or (ii) the day on which a person is selected by the Board to fill the office held by the director.

Approval of Proposal Number 2 (ratification of the appointment of the independent registered public accounting
firm), Proposal Number 3 (advisory vote to approve executive compensation), Proposal Number 4 (shareholder proposal regarding independent chairman) and Proposal Number 5 (shareholder proposal regarding climate assessment report) requires the
affirmative vote of a majority of the votes cast on the proposal (either in person or by proxy).

If your shares are held in street name (that is, through a broker, bank, trustee, nominee or other holder of
record), you are considered a beneficial owner of those shares. As the beneficial owner of those shares, you have the right to direct your broker, bank or nominee how to vote. If you do not provide voting instructions to your broker in advance of
the Annual Meeting, New York Stock Exchange (NYSE) rules grant your broker discretionary authority to vote on the ratification of the independent registered accounting firm in Proposal Number 2. If you do not provide voting instructions, your
broker will not have discretion to vote your shares on Proposal Numbers 1, 3 ,4 and 5 resulting in what is referred to as broker non-votes on those matters.

The Board recommends that you vote FOR each of the nominees in Proposal Number 1, FOR Proposal Numbers 2 and 3
and AGAINST Proposal Numbers 4 and 5.

In accordance with Utah law, abstentions and broker non-votes are not treated as votes cast and, therefore, are
not counted in determining which directors are elected under Proposal Number 1 and which matters are approved under Proposal Numbers 2, 3, 4 and 5.

Whether you hold shares directly as a shareholder of record or in street name (that is, through a broker, bank,
trustee, nominee or other holder of record), you may direct how your shares are voted without participating in the Annual Meeting. There are three ways to vote by proxy:

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Via the Internet — Shareholders who have received a Notice of Internet
Availability of Proxy Materials by mail may submit proxies over the Internet by following the instructions on the notice. Shareholders who have received proxy materials by email may submit proxies over the Internet by following the
instructions included in the email. Shareholders who have received a paper copy of a proxy card or voting instruction card by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction
card.

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By Telephone — Shareholders who live in the United States or Canada may
submit proxies by telephone by calling 1-800-690-6903 and following the instructions. Shareholders of record who have received a notice of Internet availability of proxy materials by mail must have the control number that appears on their
notice available when voting. Shareholders of record who have received a proxy card by mail must have the control number that appears on their proxy card available when voting. Shareholders who hold shares in street name who have received
proxy materials by email must have the control number included in the email available when voting.

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By Mail — Shareholders who have received a paper copy of a proxy card or
voting instruction card by mail may submit proxies by completing, signing and dating their proxy card or voting instruction card and mailing it in the accompanying pre-addressed envelope.

If you sign and return your proxy card but do not give any voting instructions, your shares will be voted “FOR”
the election of each of the director nominees listed in Proposal Number 1 below, “FOR” Proposal Number 2, “FOR” Proposal Number 3, “AGAINST” Proposal Number 4 and “AGAINST” Proposal Number 5. To our knowledge, no other matters will be presented
at the Annual Meeting. However, if any other matters of business are properly presented, the proxy holders named on the proxy card are authorized to vote the shares represented by proxies according to their judgment.

Confidential Voting Policy

The Board maintains a confidential voting policy pursuant to which Broadridge Financial Services, Inc.
(Broadridge) receives shareholder proxies or voting instructions, and representatives of Broadridge, serving as independent inspectors of election, certify the vote. Proxies, as well as telephone and Internet voting instructions, will be kept
confidential from management (except in certain cases where it may be necessary to meet legal requirements, including a contested proxy solicitation or where a shareholder writes comments on the proxy card). Reports concerning the vote may be
made available to the Company, provided such reports do not reveal the vote of any particular shareholder.

Revocation of Proxies

After you submit your proxy you may revoke it at any time before voting takes place at the Annual Meeting. You
can revoke your proxy in two ways: (i) deliver to the Secretary of the Company a written notice, dated later than the proxy you want to revoke, stating that the proxy is revoked or (ii) submit new telephone or Internet instructions or deliver a
validly executed later-dated proxy. For this purpose, communications to the Secretary of the Company should be addressed to 1400 Douglas Street, 19th Floor, Omaha,
Nebraska 68179 and must be received before the time that the proxy you wish to revoke is voted at the Annual Meeting. Please note that if your shares are held in street name (that is, a broker, bank, trustee or other nominee holds your shares on
your behalf) and you wish to revoke a previously granted proxy, you must contact that entity and submit new voting instructions to your broker, bank, trustee or nominee.

The Company will pay the entire cost of preparing, printing, mailing and distributing the notices and proxy
materials and soliciting votes. In addition to the mailing of the notices and proxy materials, proxies may be solicited by personal interview, telephone and electronic communication by the directors, officers and employees of the Company acting
without special compensation. We also make arrangements with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the street name holders of shares held of record by such individuals, and
the Company will reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection with such solicitation. In addition, the Company engaged Morrow Sodali, LLC, 470 West Avenue, Stamford, CT
06902, to solicit proxies on its behalf. The anticipated fees of Morrow Sodali LLC are $17,500, plus certain other customary fees and expenses.

Attending the Annual Meeting

An admission ticket will be required if you desire to attend the Annual Meeting in person. To be admitted to
the 2020 Annual Meeting, you must have been a shareholder at the close of business on the Record Date or be the legal proxy holder or qualified representative of a shareholder and bring with you your admission ticket and a valid government-issued
photo identification card, such as a driver’s license or passport. Persons without an admission ticket or proper identification may be denied admission to the Annual Meeting.

To obtain an admission ticket, go to www.proxyvote.com. You will need to enter your 16-digit control
number, which can be found on your Notice of Internet Availability of Proxy Materials, voting instruction card and proxy card. The deadline to obtain an admission ticket is May 13, 2020.

You may obtain directions to the Annual Meeting by contacting the Secretary of the Company at the address set
forth on the notice page of this Proxy Statement. Please note that the use of cameras (including via cell phone with photographic capabilities), recording devices and other electronic devices is strictly prohibited at the Annual Meeting.

For your convenience, you may also listen to the Annual Meeting via a live audio-only webcast. You may listen
to the live audio-only webcast of the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/UNP2020 when you enter your 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card
or on the instructions that accompanied your proxy materials. Instructions on how to listen to the Annual Meeting via live audio-only webcast are posted at www.virtualshareholdermeeting.com/UNP2020.

As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the
Annual Meeting may be held solely by means of remote communication. If we decide to hold the Annual Meeting solely by means of remote communication, the meeting will occur at the above date and time via live audio cast webcast, and you or your
proxyholder will be able to participate, vote and examine our shareholder list by visiting www.virtualshareholdermeeting.com/UNP2020 website and using your 16-digit control number. We will announce any decision to hold the meeting solely by means
of remote communication in advance, and details on how to participate will be available at https://www.up.com/investors.

Information Regarding the Company

References to the Company’s website included in this Proxy Statement and in the Company’s 2019 Annual Report on
Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained in, or available through, the website.

The Board currently consists of twelve members. The Corporate Governance and Nominating Committee of the Board
proposed, and the Board recommended, that eleven of the twelve individuals currently serving as directors each be nominated for re-election to the Board at the Annual Meeting. Each of the nominees has consented to being named as a nominee and to
serve if elected. If any nominee(s) for director for any reason should become unavailable for election, it is intended that discretionary authority will be exercised by the persons named in the enclosed proxy in respect of the election of such
other person(s) as the Board shall nominate.

Thanks to Our Retiring Director. Erroll B. Davis, Jr., a
valued member of our Board and Chair of our Compensation and Benefits Committee, will be retiring as a director at the Annual Meeting and will not stand for
re-election. The Board wishes to thank Mr. Davis for his years of dedicated service and work on behalf of the Company and its shareholders.

Vote Required for Approval

Directors will be elected by a majority of the votes cast by the shares present at the Annual Meeting and
entitled to vote on the election of directors, which means that a nominee will be elected if he or she receives more “for” votes than “against” votes. Pursuant to Section 9 of Article I of the Company’s By-Laws and applicable laws of the State of
Utah, if a nominee does not receive more “for” votes than “against” votes, he or she will be elected to a shortened term that terminates on the earlier of: (i) 90 days after the day on which the Company certifies the voting results; or (ii) the
day on which a person is selected by the Board to fill the office held by the director.

The Board recommends a vote FOR the election of each of the nominated directors.

Directors/Nominees

The following identifies the Company’s nominees for election to the Board. Each of the nominees currently
serves as a director. Each nominee, if elected, will serve for a term of one year or until his or her successor is elected and qualified.

Mr. Card most recently served as President of Franklin Pierce University from 2015 until 2016, and
also previously served as the Executive Director of the Office of the Provost and Vice President for Academic Affairs at Texas A&M University until he became President of Franklin Pierce University. Prior to that, Mr. Card served as
Chief of Staff to President George W. Bush, the 11th Secretary of Transportation under President H.W. Bush, and Deputy Assistant to the President and
Director of Intergovernmental Affairs for President Ronald Reagan. Additionally, Mr. Card previously served as Vice President-Government Relations for General Motors Corporation, and as the President and Chief Executive Officer of the
American Automobile Manufacturers Association.

Mr. Card has extensive senior-level experience in the federal government and the transportation industry, as well as invaluable experience in economic and international affairs, due to his roles as Chief of Staff to President George W.
Bush; the 11th Secretary of Transportation under President H.W. Bush; the Deputy Assistant to the President and Director of Intergovernmental Affairs for
President Ronald Reagan; Vice President-Government Relations for General Motors Corporation, one of the world’s largest auto manufacturers; and President and Chief Executive Officer of the American Automobile Manufacturers Association.

Most recently, Mr. DeLaney served as Chief Executive Officer of Sysco Corporation (Sysco), a food
marketing and distribution company, from March 2009 until his retirement in December 2017. Prior to that, Mr. DeLaney served in various other roles for Sysco, including Executive Vice President and Chief Financial Officer, and then
President.

Mr. DeLaney has valuable business and strategic leadership experience, as well as knowledge of rail operations from a customer perspective, due to serving as the Chief Executive Officer of Sysco. Additionally Mr. DeLaney has an extensive
finance background, having also previously acted as Sysco’s Chief Financial Officer, and has significant experience serving on the boards of other public companies.

Most recently, Mr. Dillon served as the Chairman of the Board of the Kroger Co. (Kroger), and as the
Chief Executive Officer of Kroger. Prior to that, Mr. Dillon served in various other roles with Kroger, including President, and Executive Vice President, and he also served as President for Dillon Companies, Inc.

Mr. Dillon has valuable retail business and strategic leadership experience as a result of his role as Chief Executive Officer of Kroger. Additionally, Mr. Dillon has a demonstrated ability to understand complex logistics operations, and
skills in financial audit matters, as well as extensive experience serving on the boards of other public companies.

Mr. Fritz is currently serving as the Chairman, President and Chief Executive Officer of the Company
and the Railroad, and has held these roles since 2015. Prior to that Mr. Fritz served in various roles for the Railroad, including President and Chief Operating Officer, Executive Vice President-Operations, Vice President-Labor Relations,
and several other executive positions in the Railroad’s operating department.

Mr. Fritz has broad, extensive operational and managerial experience, as well as a deep institutional knowledge and track record of success, due to his lengthy tenure with the Company and the Railroad.

Most recently, Ms. Hopkins was the Chief Executive Officer of Citi Ventures and the Chief Innovation
Officer of Citigroup, Inc., an international investment bank and financial services corporation, holding both positions from 2008 to 2016. Prior to that Ms. Hopkins served in various roles with Citigroup, including Chief Operations and
Technology Officer, Senior Advisor to Corporate and Investment Bank and Head of Corporate Strategy. Ms. Hopkins also has served as Chief Financial Officer for each of Lucent Technologies and The Boeing Company, and has served in various
roles for General Motors Company, including Vice President of Finance, Europe and General Auditor, and as the Corporate Controller for Unisys Corporation.

Ms. Hopkins has significant experience in finance, technology and innovation due to her various leadership positions overseeing those areas at multinational companies. Additionally, Ms. Hopkins has extensive experience serving on the
boards of other public companies.

Ms. Lute is currently serving as the President and Chief Executive Officer of SICPA, North America, a
global provider of security inks; a Special Advisor to the Secretary-General of the United Nations, where she has held several position in peacekeeping and peace building; and as a Director for the Center for Internet Security (CIS); and
has held such positions since 2017, 2016 and 2015 respectively. Prior to that, Ms. Lute served as the Chief Executive Officer for CIS, a nonprofit organization focused on developing cyberdefense best practices, from 2015 to 2016, and has
also served as the Deputy Secretary for the U.S. Department of Homeland Security, and on the National Security Council Staff under Presidents George H.W. Bush and William Jefferson Clinton. Ms. Lute has also served in the United States
Army.

Ms. Lute has unique and invaluable knowledge and leadership experience that she has gained through her extensive military and government service, including her service at the U.S. Department of Homeland Security and the United Nations.
Additionally, she has expertise with cyber security matters developed through her role as Chief Executive Officer of CIS, an operating not-for-profit organization and home of the Multi-State Information Sharing and Analysis Center
providing cybersecurity services for state, local, tribal and territorial governments.

Mr. McCarthy is currently serving as chairman of McCarthy Group, LLC, a private investment group
which he co-founded in 1986, and currently serves as the Company’s lead independent director.

Mr. McCarthy has extensive experience providing strategic and operational advice to businesses in various sectors of the economy, as well as financial expertise and a valuable background in leading successful investment companies, gained
through founding and serving as Chairman of McCarthy Group, LLC. Additionally, Mr. McCarthy has significant experience serving on the boards of other public companies.

Mr. McLarty is currently serving as the President of McLarty Associates (formerly Kissinger McLarty
Associates), an international strategic advisory and advocacy firm; Executive Vice Chairman of RML Automotive; and Chairman and President of McLarty Companies, a fourth generation, family-owned transportation business; and has held these
positions since 1999, 2007 and 1998, respectively. Prior to that, Mr. McLarty served in several positions in the Clinton White House, including Chief of Staff to the President, Counselor to the President and Special Envoy for the
Americas, and also served as Chairman and Chief Executive Officer of Arkla, Inc., a Fortune 500 natural gas company.

Mr. McLarty has valuable business leadership experienced due to his time as the Chief Executive Officer of Arkla, Inc., as well as extensive exposure and expertise in international business and regulatory matters gained as President of
McLarty Associates. Additionally, he has significant experience in government service at the highest levels gained through his several positions in the Clinton White House. Mr. McLarty also has experience serving on the board of Acxiom
Corporation, another public company.

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BHAVESH V. PATEL

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INDEPENDENT

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AGE: 53

DIRECTOR SINCE: 2017

COMMITTEES:

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EXPERIENCE

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Chief Executive Officer of LyondellBasell Industries, N.V.

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Mr. Patel is currently serving as the Chief Executive Officer of LyondellBasell Industries, N.V.
(LyondellBasell), an international plastics, chemical and refining company, and has held this position since 2015, and until recently, served as the Chairman of LyondellBasell’s management board. Before being named Chief Executive Officer
of LyondellBasell, Mr. Patel held a variety of senior leadership roles at LyondellBasell, including Senior Vice President, Olefins and Polyolefins-Americas and Europe; Senior Vice President, Olefins and Polyolefins-Europe, Asia,
International and Technology; and Executive Vice President, Olefins and Polyolefins-Europe, Asia, International and Technology. Prior to joining LyondellBasell, Mr. Patel held multiple leadership positions at Chevron Phillips Chemical
Company.

Mr. Patel has extensive business and leadership experience gained from his several senior positions at Chevron Phillips and LyondellBasell, and as the current Chief Executive Officer of LyondellBasell, one of the largest plastics,
chemical and refining companies in the world. Additionally Mr. Patel, through those same roles, has valuable international and global expertise and knowledge of rail operations from a customer perspective.

Mr. Villarreal is currently serving as a non-employee advisor with Akin, Gump, Strauss, Hauer &
Feld LLP, an international law firm, and was previously a partner at the firm. Mr. Villareal also previously served as Assistant Attorney General for the Public Finance Division of the Texas Attorney General’s Office, and has served in
senior roles in numerous presidential campaigns, as well as in the role of United States Commissioner General to the Shanghai 2010 World Expo.

Mr. Villarreal has valuable legal, regulatory and compliance expertise, as well as extensive government affairs experience gained from his service in state and federal public offices, his involvement in presidential campaigns, and as a
partner with Akin, Gump, Strauss Hauer & Feld, LLP. Additionally, Mr. Villarreal has significant service and experience on boards of other public companies, including PMI Group, Inc., First Solar, Inc. and Walmart Inc.

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CHRISTOPHER J. WILLIAMS

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INDEPENDENT

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AGE: 62

DIRECTOR SINCE: 2019

COMMITTEES:

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EXPERIENCE

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Chairman Siebert Williams Shank & Co.

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Mr. Williams is currently serving as the Chairman of Siebert Williams Shank & Co., LLC, an
investment banking and financial services company, and has held this position since November 4, 2019, when The Williams Capital Group, L.P. and Williams Capital Management, LLC (collectively Williams Capital), an investment banking and
financial services firm that Mr. Williams founded, merged with Siebert Cisneros Shank & Co., L.L.C. Prior to the merger, Mr. Williams served as the Chairman and Chief Executive Officer of Williams Capital, holding that position since
the company’s formation in 1994. Mr. Williams also previously worked at Jeffries and Company and Lehman Brothers.

Mr. Williams has extensive financial, accounting and strategic knowledge gained during his years of experience in investment banking and finance, as well as valuable executive management and leadership experience due to his role as
Chairman and Chief Executive Officer of Williams Capital. Additionally, he has significant experience serving on the boards of other public companies, including, in addition to those listed below, Walmart Inc.

The Corporate Governance and Nominating Committee considered the character, experience, qualifications and
skills of each director nominee when determining whether he or she should serve as a director of the Company. Consistent with the stated criteria for director nominees described on pages 17 and 19
below and included in the Company’s Corporate Governance Guidelines and Policies, the Committee determined that each director nominee exhibits a high degree of integrity, has significant professional accomplishments, and has proven leadership
experience. Each director nominee is or has been a leader in his or her respective field and brings diverse talents and perspectives to the Board. The Committee also considered the experience and qualifications that each director nominee brings
to the Board outlined above in each director’s biographical information, as well as service on boards of other public companies.

The Committee utilizes the following list of skills, attributes and qualities that are particularly relevant to
the Company when evaluating director nominees.

•

Economics/Finance – Background in finance, banking, economics, and the
securities and financial markets, both domestic and international;

•

Operations – Knowledge or experience in the transportation industry,
particularly the rail industry and rail operations;

Government and Regulatory Expertise – Experience in regulatory, political
and governmental affairs or public service in legislative or executive positions in Washington D.C. or state government, especially in states where the Company has a significant operating presence;

•

Legal – Possesses a law degree or experience in the legal profession;

•

International/Global Expertise – An international background or global
expertise given the significant rail interchange operations with Mexican and Canadian rail systems, along with the Company’s extensive international marketing efforts;

Below we identify the balance of skills and qualifications each director nominee brings to the Board. The fact
that a particular skill or qualification is not designated does not mean the director nominee does not possess that particular attribute. Rather, the skills and qualifications noted below are those reviewed by the Corporate Governance and
Nominating Committee and the Board in making nomination decisions and as part of the Board succession planning process. We believe the combination of the skills and qualifications shown below demonstrates how the Board is well-positioned to
provide strategic oversight and guidance to management.

The Corporate Governance and Nominating Committee is responsible for developing and periodically reviewing and
recommending to the Board the appropriate skills and characteristics required of Board members in the context of the current composition of the Board. Such criteria, as described in the Company’s Corporate Governance Guidelines and Policies,
include: business and management experience; familiarity with the business; customers and suppliers of the Company; varying and complementary talents, backgrounds and perspectives; diversity (inclusive of gender, race, ethnicity and national
origin); and relevant legal, regulatory and stock exchange requirements applicable to the Board and certain of its Committees.

All potential new Board candidates should exhibit a high degree of integrity and ethics consistent with the
values of the Company and the Board. In all our director nominee searches, the Committee is committed to actively seeking out highly qualified women (Ms. Lute and Ms. Hopkins) and other diverse candidates (Messrs. Patel, Villarreal and Williams),
for consideration as nominees to the Board. The Committee ultimately seeks to identify and nominate candidates with diverse talents, backgrounds and perspectives who will enhance and complement the skills and expertise of the Board and satisfy
the Board membership criteria included in the Company’s Corporate Governance Guidelines and Policies. In determining the independence of a candidate, the Committee relies upon the independence standards adopted by the Board. In addition, the
Committee requires that all candidates:

•

Exhibit a high degree of integrity and ethics consistent with the values of the Company and the Board;

•

Have demonstrable and significant professional accomplishments; and

•

Have effective management and leadership capabilities.

The Committee also values familiarity with the rail transportation industry and considers the number of other
public boards on which candidates serve when determining whether the individual circumstances of each candidate will allow the candidate sufficient time to effectively serve on the Board and contribute to its function and activities.

The Committee meets each year to consider the inclusion of nominees in the Company’s proxy statement. During
this meeting, the Committee considers each nominee by:

•

Reviewing relevant information provided by the nominee in his or her Company questionnaire;

•

Applying the criteria listed above; and

•

Assessing the performance of the Board and each nominee during the previous year with respect to current members of the Board.

As part of the Committee’s oversight of the Board’s self-evaluation process, the Committee assesses the
effectiveness of the criteria listed above when evaluating all new director candidates and when assessing the composition of the Board. The Committee will consider candidates recommended by shareholders under the same standards after concluding
that any such recommendations comply with the requirements outlined below. During 2019, the Company retained the services of Heidrick & Struggles to help identify and evaluate suitable candidates for consideration to replace retiring
directors. Mr. Williams was vetted and recommended by Heidrick & Struggles as a director candidate.

We believe that Board tenure diversity is important and directors with many years of service provide the Board
with a deep knowledge of our Company, while newer directors lend fresh perspectives. The chart below reflects the Board tenure of our current directors. The average tenure of all directors currently serving on our Board and nominated for
re-election is six and a half years.

Evaluation of Board and Committee Effectiveness and
Performance

The Corporate Governance and Nominating Committee is responsible for overseeing the annual self-evaluation
process of the Board and its committees, which is used by the Board and each committee to assess their effectiveness, their performance and opportunities for improvement. In addition, each committee reviews its Charter annually and reports to the
Corporate Governance and Nominating Committee and the Board on its self-evaluation and review of its Charter.

During 2019, the Board and committee evaluation process involved the distribution of a self-assessment
questionnaire to all Board and committee members inviting a review and written comments on all aspects of the Board and each committee’s role and responsibilities, as well as director performance and Board dynamics. Comments solicited related to
a holistic review of how the Board can improve its key functions overseeing the Company’s overall governance and the enterprise risk profile of the Company, approving the Company’s strategic plan, monitoring strategy implementation and generally
overseeing management’s operations of the business. In particular, for both the Board and the relevant committee, the process solicited ideas from directors about (i) improving prioritization of issues, (ii) improving quality of Board and
committee discussions on key matters, (iii) identifying specific issues that should be discussed in the future, and (iv) identifying any other matters of importance to the functioning of the Board or committee.

The Corporate Governance and Nominating Committee will provide oversight for each committee and the Board as
the directors continue discussing the results of this evaluation and work to address the recommendations.

Previously in 2018, an independent third party interviewed each member of the Board, as well as two recently
retired directors, as part of the annual self-evaluation process of the Board and its committees and the independent third party presented the results to the Board. This presentation contained a summary of recommendations and items for discussion
regarding Board and committee effectiveness based on these interviews.

Consideration of Director Nominees and Proxy Access

The Company’s By-Laws provide for “proxy access” for certain director candidates nominated by shareholders.
Under the By-Laws, a shareholder or group of shareholders who have continuously held for three years a number of shares of Company common stock equal to three percent of the outstanding shares of Company common stock may request that the Company
include in the Company’s proxy materials director nominees representing up to the greater of two directors or 20% of the current number of directors. Eligible shareholders wishing to have such candidates included in the Company’s Proxy Statement
for the 2021 Annual Meeting of Shareholders should provide the information specified in the By-Laws to the Secretary of the Company in writing during the period beginning on November 4, 2020 and ending on December 4, 2020, and should include the
information and representations required by the proxy access provisions set forth in the Company’s By-Laws.

The Corporate Governance and Nominating Committee will consider and evaluate individuals for service on the
Board suggested by directors and other interested parties. Shareholders desiring to recommend candidates for consideration at the 2021 Annual Meeting should advise the Secretary of the Company in writing during the period beginning on January 14,
2021 and ending on the close of business February 13, 2021, and should include the following information required by the nomination procedures set forth in the Company’s By-Laws, as well as any other information that would assist the Committee in
evaluating the recommended candidates: (i) the name, age, and business and residence addresses of the candidate, (ii) the principal occupation of the candidate, and (iii) the number of shares of Company common stock beneficially owned by the
candidate. A shareholder should also provide (i) his or her name and address, (ii) the number of shares of Company common stock beneficially owned by such shareholder, (iii) a description of all arrangements between himself or herself and the
candidate and any other person pursuant to which the recommendation for nomination is being made, and (iv) the candidate’s written consent agreeing to any resulting nomination and to serve as a director if elected. The By-Laws are available on
the Company’s website at www.up.com/investors/governance, and shareholders may obtain a printed copy by contacting the Secretary of the Company at the address set forth on the notice page of this Proxy Statement.

We are committed to implementing and following high standards of corporate governance, which we believe are
important to the success of our business and create shareholder value. The Board has adopted Corporate Governance Guidelines and Policies, and, with ongoing input from the Corporate Governance and Nominating Committee, will continue to assess the
appropriateness of these guidelines and policies and implement such changes and adopt such additions as may be necessary or desirable to promote the effective governance of the Company. We post these guidelines and policies on our website at www.up.com/investors/governance.

Director Independence

To assist it in making determinations of a director’s independence, the Board has adopted the independence
standards set forth below. The Board affirmatively determined that retiring director Mr. Davis, and all remaining directors, except for Mr. Fritz, who are also director nominees, Ms. Hopkins and Ms. Lute and Messrs. Card, DeLaney, Dillon,
McCarthy, McLarty, Patel, Villarreal and Williams, have no material relationship with the Company or any of its consolidated subsidiaries, including Union Pacific Railroad Company (the Railroad), (either directly or as a partner, shareholder or
officer of an organization that has a relationship with the Company) and are independent within the meaning of the applicable listing standards of the NYSE and the Director Independence Standards adopted by the Board. Additionally, the Board
determined that all Board Committees are comprised entirely of independent directors and that all members of the Audit Committee, Compensation and Benefits Committee and Finance Committee meet the additional independence standards applicable to
such committee members as set forth below.

The Board’s independence determination included a review of the payments over the last three years between the
Railroad and LyondellBasell Industries, N.V. (LyondellBasell). Mr. Patel is the Chief Executive Officer of LyondellBasell. LyondellBasell paid the Railroad approximately $127 million, $115 million, and $112 million for transportation services in
2019, 2018 and 2017 respectively. These amounts were significantly less than 2% of LyondellBasell’s consolidated gross revenues for any of the past three years (0.4% for 2019, 0.3% for 2018, and 0.3% for 2017).

The Board also reviewed a payment made in 2019 to The Williams Capital Group, L.P. (Williams Capital).
Mr. Williams is the Chairman of Siebert Williams Shank & Co., the successor to Williams Capital. The Company paid Williams Capital $87,500 in fees to serve as a co-manager in a July 2019 debt transaction. The Board noted that this payment was
significantly less than 2% of Williams Capital’s consolidated gross revenues.

Director Independence Standards

An “independent” director is a director whom the Board has affirmatively determined has no material
relationship with the Company or any of its consolidated subsidiaries either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. Accordingly, a director is also not independent if:

(1)

the director is, or within the last three years has been, an employee of the Company or an immediate family member of the director is,
or within the last three years has been, an executive officer of the Company;

(2)

the director (a) or an immediate family member is a current partner of a firm that is the Company’s internal or external auditor; (b)
is a current employee of such a firm; (c) has an immediate family member who is a current employee of such firm and personally works on the Company’s audit; or (d) or an immediate family member was within the last three years (but is no
longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time;

(3)

the director, or a member of the director’s immediate family, is, or within the last three years has been, an executive officer of
another company where any of the Company’s present executives at the same time serves or served on that company’s compensation committee;

(4)

the director, or a member of the director’s immediate family, received or has received during any 12-month period within the last
three years any direct compensation from the Company in excess of

$120,000, other than compensation for Board service and pension or other forms of deferred compensation for
prior service with the Company, and compensation received by the director’s immediate family member for service as a non-executive employee of the Company;

(5)

the director is a current employee of a company, including a professional services firm, that has made payments to or received
payments from the Company, or during any of the last three years has made payments to or received payments from the Company, for property or services in an amount that, in any of the last three fiscal years, exceeded the greater of
$1 million or 2% of the other company’s or firm’s consolidated gross revenues;

(6)

a member of the director’s immediate family is a current executive officer of another company, or a partner, principal or member of a
professional services firm, that has made payments to or received payments from the Company, or during any of the last three fiscal years has made payments to or received payments from the Company, for property or services in an amount
that, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of the other company’s or firm’s consolidated gross revenues; and

(7)

the director is an executive officer, director or trustee of a non-profit organization to which the Company or Union Pacific
Foundation makes, or within the last three years has made, payments that, in any single fiscal year, exceeded the greater of $1 million or 2% of the non-profit organization’s consolidated gross revenues (amounts that the Company or Union
Pacific Foundation contribute under matching gifts programs are not included in the payments calculated for purposes of this standard).

For purposes of these standards, an “immediate family” member includes a director’s spouse, parents, children,
siblings, mother and father-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than a domestic employee) who shares the director’s home.

In addition to the Board’s Director Independence Standards above, a director is not considered independent for
purposes of serving on the Audit Committee or the Compensation and Benefits Committee, and may not serve on such committees, if the director: (a) accepts, directly or indirectly, from the Company or any of its subsidiaries, any consulting,
advisory, or other compensatory fee, other than Board and committee fees and fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company; or (b) is an “affiliated person” of the
Company or any of its subsidiaries; each as determined in accordance with NYSE and SEC rules and regulations.

The Board annually reviews related party transactions involving directors and director nominees in conjunction
with making director independence determinations and preparing the annual Proxy Statement. We require that executive officers report any transactions with the Company under the Statement of Policy on Ethics and Business Conduct (Business Conduct
Policy) that covers all Company employees. Under the Business Conduct Policy, the Audit Committee reviews any transaction reported by executive officers and refers any reported transactions to the Corporate Governance and Nominating Committee for
evaluation pursuant to the Company’s Related Party Transaction Policies and Procedures (the Related Party Policy) described below.

Under the Company’s Related Party Policy, transactions with related parties are subject to approval or
ratification by the Corporate Governance and Nominating Committee. Transactions subject to Committee review and approval include any transaction in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar
year, (ii) the Company is a participant, and (iii) any related party will have a direct or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).

“Related party” is defined under the policy as any (i) person who is or was during the last fiscal year an
executive officer or director of the Company or nominee for election as a director, (ii) greater than 5% beneficial owner of the Company’s common stock, or (iii) immediate family member of any of the foregoing. “Immediate family” member includes
a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee).

If advance Corporate Governance and Nominating Committee approval of a transaction is not feasible, then the
transaction will be considered and, if the Committee determines it to be appropriate, ratified at the Committee’s next regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Committee will consider, among
other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the
transaction.

Under the Related Party Policy, the Committee may pre-approve certain transactions, even if the aggregate
amount involved exceeds $120,000. Such transactions include (i) any transaction with another company at which a related party’s only relationship is as an employee (other than an executive officer), direct or beneficial owner of less than 10% of
that company’s shares, if the aggregate amount involved does not exceed the greater of $1 million or 2% of that company’s total annual revenues; and (ii) any charitable contribution, grant or endowment by the Company to a charitable organization,
foundation, or university at which a related party’s only relationship is as an employee (other than an executive officer) or a director, if the aggregate amount involved does not exceed the lesser of $1 million or 2% of the charitable
organization’s total annual receipts. Additionally, the Board has delegated to the Chair of the Committee the authority to pre-approve or ratify, as applicable, any transaction with any related party in which the aggregate amount involved is
expected to be less than $1 million. At each regularly scheduled meeting of the Committee, a summary of each new transaction deemed pre-approved will be provided to the Committee for its review.

Related Party Transactions in 2019

Since 1994, the Railroad has historically and routinely done business with Omaha Track, Inc. and its related
companies (Omaha Track). Kelvin Whited, who became the Chief Financial Officer of Omaha Track in July 2015, is the spouse of Elizabeth F. Whited, who became the Company’s Executive Vice President and Chief Human Resources Officer in August 2018.
Ms. Whited served as the Company’s Executive Vice President and Chief Marketing Officer until August 15, 2018, when she was appointed Executive Vice President and Chief Human Resources Officer.

In 2019, the Railroad paid Omaha Track or its affiliates approximately $19.9 million for tie disposal services,
on-track scrap metal removal and railcar repairs. All of these transactions are managed by the Railroad’s Supply Department and Ms. Whited has no involvement in these matters.

Omaha Track has been a transload provider to customers of the Railroad for transload shipments of various
materials. The Railroad paid Omaha Track approximately $9,400 in 2019 in connection with these transload services. Ms. Whited is not involved in any commercial or rate discussions involving Omaha Track.

The Railroad provides transportation services to LyondellBasell. Mr. Patel is the Chief Executive Officer and a
director of LyondellBasell and a director of the Company. Payments to the Railroad over the last three years from LyondellBasell are detailed on page 20 of this Proxy Statement.

These transactions were ratified by the Corporate Governance and Nominating Committee under the Company’s
Related Party Policy.

The Board believes it is in the best interest of the Company for the Board to periodically evaluate the
leadership structure of the Company and make a determination regarding whether to separate or combine the roles of Chairman and CEO based on circumstances at the time of its evaluation. By retaining flexibility to adjust the Company’s leadership
structure, the Board is best able to provide for appropriate management and leadership of the Company and address any circumstances the Company may face. Per the Company’s Corporate Governance Guidelines and Policies, the Board annually will
elect a Chairman of the Board, who may or may not be the CEO of the Company. Additionally, the Guidelines provide that if the individual elected as Chairman of the Board is not an independent director, the independent directors also will elect a
lead independent director. The Board determined that having a combined Chairman and CEO at this time best allows the Board and management to focus on the oversight and implementation of the Company’s strategic initiatives and business plan to
efficiently and effectively protect and enhance the Company’s long-term success and shareholder value.

In addition, the independent directors of the Board elected Mr. McCarthy as the lead independent director with
the following responsibilities:

✔

Preside at meetings of the Board at which the Chairman and CEO are not present, including executive sessions of the independent
directors;

✔

Approve the flow of information sent to the Board, and approve the agenda, schedule and what materials are sent for the Board
meetings;

✔

Serve as the liaison between the independent directors and the Chairman and CEO;

✔

Be available for consultation and communication with major shareholders as appropriate;

✔

Oversee the process of evaluating and compensating the Chairman and CEO (in conjunction with the Compensation and Benefits Committee);

✔

Assure that a succession plan is in place for the Chairman and CEO, as well as the lead independent director;

✔

Authorize or recommend the retention of consultants who report directly to the full Board; and

✔

Assist the Board and Company officers in compliance with, and implementation of, the Company’s governance guidelines and policies.

The independent directors conducted executive sessions at all Board meetings in 2019. Mr. McCarthy also has the
authority to call executive sessions of the independent directors. The Board has adopted a number of strong corporate governance practices that provide effective, independent oversight of management, including:

✔

Holding executive sessions of the non-management, independent directors after every Board meeting;

✔

Providing that only independent directors serve on key Board committees; and

✔

Conducting an annual performance evaluation of the Chairman and CEO by the independent directors.

The Board believes that the current leadership structure and succession planning coupled with an active lead
independent director provides effective oversight of management and responsiveness to shareholders, while also continuing the solid leadership of the Company and the Board necessary to effect execution of the Company’s strategic plans.

The Board of Directors is responsible for overseeing the assessment and management of the critical enterprise
risks affecting the Company. The Board delegates to the Audit Committee primary responsibility for oversight of managing risks related to operations of the Company.

Management identifies and prioritizes enterprise risks (included in the risk factors disclosed in our Annual
Report on Form 10-K) and regularly presents them to the Board for its review and consideration. The senior executives responsible for implementation of appropriate mitigation strategies for each of the Company’s enterprise risks, along with the
chief compliance officer, provide reports directly to the Board during the year. The Audit Committee also receives reports throughout the year from the chief compliance officer and the senior executives responsible for financial reporting,
cybersecurity and environmental matters.

In addition, the Audit Committee oversees the Company’s internal audit of enterprise risks selected for review
and evaluation based upon the Company’s annual risk assessment model with the purpose of evaluating the effectiveness of mitigating controls and activities of Company personnel. The Company’s internal auditors present to the Audit Committee
findings regarding the mitigating controls and processes for the enterprise risks selected for review. The Audit Committee, in turn, reports those findings to the entire Board. The Company’s enterprise risk management process is dynamic and
continually monitored so that the Company can timely identify and address any potential risks that arise in the ever-changing economic, political, legal and technology threat environment in which the Company operates.

In accordance with applicable provisions of Utah law and the By-Laws of the Company, the
business and affairs of the Company are managed under the direction of the Board. The Board has established standing Committees and adopted guidelines and policies to assist it in fulfilling its responsibilities as described below.

During 2019, the Board met six times. None of the directors attended fewer than 75% of
the aggregate number of meetings of the Board and the Committees on which he or she served. Our Corporate Governance Guidelines and Policies reflect our policy that all directors should attend the Annual Meeting. In accordance with this policy,
all directors then serving attended last year’s Annual Meeting.

The Board currently maintains four standing committees − the Audit Committee, Finance
Committee, Compensation and Benefits Committee, and Corporate Governance and Nominating Committee. Each of the committees operates under a written charter adopted by the Board, copies of which are available on the Company’s website at www.up.com/investors/governance,
and shareholders may obtain copies by contacting the Secretary of the Company at the address set forth on the notice page of this Proxy Statement. Each committee has the ability to retain outside advisors to assist it in the performance of its
duties and responsibilities. All Board Committees are composed entirely of independent directors, satisfying both the independence standards of the NYSE and the Director Independence Standards set forth in the Company’s Corporate Governance
Guidelines and Policies. Audit Committee members and Compensation and Benefits Committee members also satisfy the additional independence criteria applicable to Audit Committee and Compensation and Benefits Committee members under the listing
standards of the NYSE.

The Board has determined that Mr. DeLaney and Mr. Dillon are “audit committee financial experts” as defined by the SEC and that each has accounting or related financial management
expertise as required by NYSE Corporate Governance Listing Standards.

​

​

Overview

​

​

Committee Functions

​

​

The Audit Committee assists the Board in fulfilling its responsibilities for overseeing our financial
reporting process and the audit of our financial statements.

The Audit Committee meets regularly with the independent registered public accounting firm of the Company, financial management, the internal auditors, the chief compliance officer and the chief legal officer to provide oversight of the
financial reporting process, internal control structure, and the Company’s compliance requirements and activities. The independent registered public accounting firm, the internal auditors, the chief compliance officer and the chief legal
officer have unrestricted access to the Committee and meet regularly with the Committee, without Company management representatives present, to discuss the results of their examinations, their opinions on the adequacy of internal controls
and quality of financial reporting, and various legal matters.

The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent registered accounting firm (as described on page 36 of this Proxy Statement).

The Audit Committee’s Report is included on page 37 of this Proxy Statement.

The Finance Committee is responsible for assisting the Board with its review and oversight of the
Company’s financial position, financing plans and programs and dividend policy and actions. The Finance Committee also assists the Board by reviewing strategic options and opportunities for the Company, including acquisitions and
divestitures.

• Oversee the Company’s
investor relations activities,
including the Company’s
interaction with the investor
community

• Review the performance of the
Company’s internal investment
committee that oversees the
investment management of
assets held by the Company’s
pension, thrift and other
funded employee benefit
programs

There were no Compensation and Benefits Committee interlocks or insider participation in 2019.

​

​

Overview

​

​

Committee Functions

​

​

The Compensation and Benefits Committee discharges the Board’s responsibilities relating to the
compensation of senior executives and provides strategic oversight of our compensation structure, including equity compensation plans and benefits programs.

The Compensation and Benefits Committee annually reviews and approves corporate goals and objectives relevant to the compensation of the Chairman and CEO and certain other elected executives. The details of the processes and procedures
involved are described in the Compensation Discussion and Analysis (CD&A). The independent members of the full Board ultimately make the final decisions regarding the Chairman and CEO’s compensation.

The Compensation and Benefits Committee Report is included on page 57 of this Proxy Statement.

​

​

• Evaluate the CEO’s performance
and, together with the other
independent directors,
determine and approve the
CEO’s compensation

• Oversee the Company’s
executive incentive plans and
review amounts of awards and
the executives who will receive
awards and refer its
determinations with respect to
the annual incentive program to
the Board for approval

• Review the CD&A and
recommend to the Board its
inclusion in our Proxy
Statement

• Oversee the Company’s
pension, thrift and equity
compensation plans and review
and recommend to the Board all
material amendments to these
plans

• Oversee the administration of
the Company’s general
compensation plans and
employee benefit plans and
periodically review the
Company’s benefit plans to
assess whether such benefit
plans remain competitive

​

Compensation Consultant

Under its charter, the Compensation and Benefits Committee has the authority to retain, terminate and approve
fees for advisors and consultants as it deems necessary. The Committee, in its discretion, uses outside advisors and experts to assist it in performing its duties and fulfilling its responsibilities. The Committee has retained Frederic W. Cook
& Co., Inc. (FW Cook) as its independent compensation consultant. A representative of FW Cook attends all Committee meetings. The Committee is solely responsible for the engagement and termination of this relationship. At its March 2020
meeting, the Committee reviewed and reaffirmed the engagement of FW Cook as the Committee’s compensation consultant and determined that the retention of FW Cook did not raise any conflicts of interest.

FW Cook advises the Committee on compensation philosophy and matters related to CEO and other executive and
director compensation. The Committee annually requests that FW Cook update compensation and performance data on the peer companies selected by the Committee, as described on page 43 of this Proxy

Statement. In addition, the Committee periodically requests that FW Cook make presentations on various topics,
such as compensation trends and best practices, regulatory changes, long-term incentive components and award mix and stock plan utilization. The Committee Chair reviews and approves all charges for these consulting services.

Under the Committee’s engagement, FW Cook also confers with management on a limited basis to promote
consistency and efficiency. In such matters, FW Cook acts in its capacity as the Committee’s advisor, and the Committee Chair reviews and approves any major projects for which management requests the assistance of FW Cook. Such projects involve
only the amount and form of executive or director compensation and may include analysis of competitive director compensation data, design and development of new compensation and stock plans, calculation of compensation amounts reported in this
Proxy Statement and review of materials prior to distribution to the Committee to confirm that the materials conform with the Committee’s philosophy and policies. The Committee Chair reviews and approves all charges for any projects requested by
management. During 2019, the Company paid fees to FW Cook only for advising on matters under the Committee’s purview. The Company did not pay any fees for additional projects or services.

In early 2020, the Committee, with the assistance of FW Cook, conducted its
annual compensation risk assessment of our executive compensation programs and confirmed that they were designed and operate within a system of guidelines and controls to avoid creating any material adverse risks to the Company.

The Corporate Governance and Nominating Committee oversees and assists the Board in fulfilling its
responsibilities relating to our corporate governance, including the practices, policies and procedures of the Board and its committees.

The Committee also reviews the size, structure and needs of the Board and Board committees, reviews possible candidates for the Board and recommends director nominees to the Board for approval.

​

​

• Identify and recommend
candidates to be nominated for
election as directors at the
Annual Meeting or to fill Board
vacancies

The Board has adopted the Union Pacific Corporation Code of Ethics for the Chief Executive Officer and Senior
Financial Officers, the Statement of Policy on Ethics and Business Conduct for employees (the Business Conduct Policy) and the Union Pacific Corporation Code of Business Conduct and Ethics for Members of the Board of Directors. We post these
codes of conduct on our website at www.up.com/investors/governance, and printed copies are available to any shareholder upon request to the Secretary of the Company at the address set forth on the notice page of this Proxy Statement. To
the extent permitted by SEC rules and the NYSE listing standards, we intend to disclose any future amendments to, or waivers from, certain provisions of these codes of conduct on our website.

Communications with the Board

Interested parties wishing to communicate with the Board may do so by U.S. mail c/o the Corporate Secretary,
Union Pacific Corporation, 1400 Douglas Street, 19th Floor, Omaha, NE 68179. Communications intended for a specific director or directors (e.g., the lead independent director, a committee chairperson or all of the non-management directors) should
be addressed to their attention and sent, by U.S. mail, to the address above. The Board has appointed and authorized the Corporate Secretary of the Company to process these communications and forward them to the appropriate directors. We forward
appropriate communications from shareholders directly to the appropriate Board member(s). If a communication is illegal, unduly hostile or threatening, or similarly inappropriate, the Corporate Secretary of the Company has the authority to
disregard or take appropriate action regarding any such communication.

During 2019, non-employee directors were compensated for their Board service as shown below. Directors who are
employees do not receive retainers or any other Board-related compensation.

•

Annual Retainer: $280,000 ($160,000 annual mandatory deferral into a Stock
Unit Account, remainder may be deferred at the director’s election)

•

Annual Mandatory Deferral: $160,000 of their Annual Retainer deferred in
the Stock Unit Account described below

•

Committee Chair Retainer: $20,000 for each standing Committee chair

•

Audit Committee Member Retainer: $10,000

•

Lead Director Retainer: $30,000

Stock Unit Grant and Deferred Compensation Plan for the
Board of Directors

Under our Stock Unit Grant and Deferred Compensation Plan for non-management directors, a director may, by
December 31 of any year, elect to defer all or a portion of any compensation (in addition to the amount mentioned above that is required to be invested in their Stock Unit Account) for service as a director in the ensuing year or years, excluding
reimbursements for expenses. Such deferred amounts may be invested, at the option of the director, in (i) a Fixed Rate Fund administered by the Company, (ii) a Stock Unit Account administered by the Company, or (iii) various notional accounts
administered by The Vanguard Group. These accounts are unfunded, unsecured obligations of the Company. The Company Fixed Rate Fund bears interest equal to 120% of the applicable federal long-term rate compounded annually. The Stock Unit Account
fluctuates in value based on changes in the price of our common stock, and equivalents to cash dividends paid on the common stock are deemed to be reinvested in the Stock Unit Account. The Vanguard Accounts are subject to earnings and value
fluctuations from the investment performance of the notional accounts at Vanguard. Payment of all deferred amounts begins in January of the year following separation from service as a director. Deferred amounts may be paid, at the election of the
director, in either a lump-sum or in up to 15 equal, annual installments.

2000 Directors Stock Plan

Under the 2000 Directors Stock Plan (the 2000 Plan) adopted by the shareholders on April 21, 2000, the Company
may grant options to purchase shares of our common stock to non-management directors. Upon recommendation of the Corporate Governance and Nominating Committee in September 2007, the Board eliminated the annual grant of options for 2008 and future
years. The Company did not award any options to non-management directors in 2019.

Previously, each non-management director, upon election to the Board of Directors, would receive a grant of
4,000 restricted shares of our common stock or restricted share units that represent the right to receive our common stock in the future (which number has been adjusted to reflect the Company’s two-for-one stock splits on May 28, 2008 and June 6,
2014). The restricted shares or share units vest on the date a director ceases to be a director by reason of death, disability or retirement, as defined in the 2000 Plan. During the restricted period, the director has the right to vote such
restricted shares and receive dividends or dividend equivalents, but may not transfer or encumber such shares or units. The director would forfeit such shares or units upon ceasing to be a director for any reason other than death, disability or
retirement. Effective August 1, 2018, the Board approved the elimination of this initial equity grant for newly elected directors.

The following table provides a summary of the compensation of our non-management directors for 2019.

NAME

​

​

FEES EARNED
OR PAID IN CASH

​

​

STOCK AWARDS (a)

​

​

OPTION AWARDS

​

​

ALL OTHER
COMPENSATION (b)

​

​

TOTAL
COMPENSATION

Andrew H. Card, Jr.

​

​

$290,000

​

​

$0

​

​

$0

​

​

$10,841

​

​

$300,841

Erroll B. Davis, Jr.

​

​

300,000

​

​

0

​

​

0

​

​

38,500

​

​

338,500

William J. DeLaney

​

​

290,000

​

​

0

​

​

0

​

​

8,657

​

​

298,657

David B. Dillon

​

​

310,000

​

​

0

​

​

0

​

​

12,036

​

​

322,036

Deborah C. Hopkins

​

​

285,833

​

​

0

​

​

0

​

​

11,563

​

​

297,396

Jane H. Lute

​

​

290,000

​

​

0

​

​

0

​

​

31,944

​

​

321,944

Michael R. McCarthy

​

​

330,000

​

​

0

​

​

0

​

​

26,411

​

​

356,411

Thomas F. McLarty III

​

​

300,000

​

​

0

​

​

0

​

​

13,107

​

​

313,107

Bhavesh V. Patel

​

​

280,000

​

​

0

​

​

0

​

​

26,688

​

​

306,688

Jose H. Villareal

​

​

284,167

​

​

0

​

​

0

​

​

16,587

​

​

300,754

Christopher J. Williams (c)

​

​

46,667

​

​

0

​

​

0

​

​

0

​

​

46,667

(a)

The following table provides the outstanding equity awards at fiscal year-end held by all individuals who served as non-management
directors in 2019. The Number of Shares in the Vesting Upon Termination column represents the shares granted to each director upon initial election to the Board and required to be held until his or her service as a member of the Board
ends.

NAME

​

​

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS

​

​

NUMBER OF SHARES
VESTING UPON TERMINATION

​

​

NUMBER OF UNITS IN
DEFERRED STOCK UNIT ACCOUNT

Andrew H. Card Jr.

​

​

0

​

​

4,000

​

​

30,782

Erroll B. Davis Jr.

​

​

0

​

​

4,000

​

​

37,812

William J. Delaney

​

​

0

​

​

0 (d)

​

​

1,105

David B. Dillon

​

​

0

​

​

4,000

​

​

7,019

Deborah C. Hopkins

​

​

0

​

​

4,000

​

​

5,429

Jane H. Lute

​

​

0

​

​

4,000

​

​

4,005

Michael R. McCarthy

​

​

0

​

​

4,000

​

​

51,089

Thomas F. McLarty III

​

​

0

​

​

4,000

​

​

30,133

Bhavesh V. Patel

​

​

0

​

​

4,000

​

​

2,285

Jose H. Villarreal

​

​

0

​

​

4,000

​

​

23,673

Christopher J. Williams

​

​

0

​

​

0(d)

​

​

0

(b)

Excess liability insurance premiums paid in 2019 for each non-management director were $1,411, except for Mr. Williams which was $0.
For each of Mr. Davis, Ms. Lute, Mr. McCarthy and Mr. Patel, the Company matched $25,000 of each directors’ charitable contributions under the Company’s charitable matching gift program which is also available to all employees of the
Company. The Company matched $10,000 in charitable contributions for Ms. Hopkins and $5,500 in charitable contributions for Mr. Villarreal. In addition, the Company began paying Nebraska state income taxes on behalf of nonresident
directors in 2014 because of their travel to Nebraska required for Company business. The reimbursement covers the incremental cost of these nonresident directors’ taxes and the directors do not claim any tax benefits for the reimbursement
in their resident states. The amounts shown in the table reflect additional federal and Nebraska income taxes paid in 2020 for the applicable director’s service, and stock option exercises, if any, during the director’s service in 2019.
The Company does not consider this a perquisite and does not gross-up or pay any state income taxes that the directors incur in their normal work locations.

(c)

Mr. Williams was elected to the Board on November 14, 2019.

(d)

Upon recommendation of the Corporate Governance and Nominating Committee, effective August 1, 2018, the Board eliminated the 4,000
share grant to non-management directors upon their election to the Board.

PROPOSAL NUMBER 2 − Ratification of Appointment of Deloitte
& Touche LLP as Independent Registered Public Accounting Firm for the Year Ending December 31, 2020

The Audit Committee has appointed Deloitte & Touche LLP as the independent registered public accounting
firm to audit the books and accounts of the Company and its consolidated subsidiaries for the year 2020 and submits this selection for ratification by a vote of shareholders as a matter of good corporate governance. In the event that the Audit
Committee’s selection of Deloitte & Touche LLP does not receive an affirmative vote of a majority of the votes cast, the Audit Committee will review its future selection of an independent registered public accounting firm.

The Audit Committee believes that the continued retention of Deloitte & Touche LLP as our independent
registered public accounting firm is in the best interests of our shareholders as there are several benefits to the Company of having a long-tenured auditor.

•

Enhanced Audit Quality. Through more than 50 years of experience with the Company, Deloitte
& Touche has gained institutional knowledge and deep expertise regarding the Company’s rail operations and business, accounting policies and practices and internal control over financial reporting.

•

Competitive Fee Structure. Due to Deloitte & Touche’s familiarity with the Company, audit
fees are competitive with peer companies.

•

Avoids Costs Associated with New Auditor. Onboarding a new independent accountant is costly
and requires a significant time commitment that could distract from management’s focus on financial reporting and controls.

The Company expects that a representative of Deloitte & Touche LLP will be present at the Annual Meeting
and will have an opportunity to make a statement if such representative desires to do so and will be available to respond to appropriate questions by shareholders.

Vote Required for Approval

Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public
accounting firm for the year ending December 31, 2020 requires the affirmative vote of a majority of the votes cast on this proposal at the Annual Meeting.

The Board recommends a vote FOR ratification of the appointment of Deloitte & Touche
LLP as independent registered public accounting firm for the year ending December 31, 2020.

Aggregate fees billed to the Company for services rendered by our independent registered public accounting firm
for each of the past two years are set forth below:

​

​

YEAR ENDED DECEMBER 31,

​

​

2019

​

​

2018

Audit Fees

​

​

$2,974,700

​

​

$2,838,350

Audit-Related Fees

​

​

509,603

​

​

697,829

Tax Fees

​

​

244,713

​

​

214,860

All Other Fees

​

​

0

​

​

0

Total

​

​

$3,729,016

​

​

$3,751,039

Audit Fees. Audit services included the integrated audit
of financial statements and internal control, quarterly reviews, comfort letters provided in conjunction with the issuance of debt, and agreed-upon procedures performed
on the Annual Report R-1 filed by Union Pacific Railroad Company with the Surface Transportation Board.

Tax Fees. Tax fees included fees for corporate tax
planning and consultation services and work performed for international tax compliance.

All Other Fees. No other services were provided to the
Company by Deloitte & Touche LLP during the years ended December 31, 2019 and 2018.

Pre-Approval of Audit and Non-Audit Services Policy

The Audit Committee’s charter requires the Committee to approve in advance all audit engagement fees and the
terms of all audit services to be provided by the independent registered public accounting firm. By approving the engagement, which is performed in conjunction with the first Board meeting of each year, the audit services are deemed pre-approved.
As part of its pre-approval policy, the Committee considers whether the provision of any proposed non-audit services is consistent with auditor independence. With respect to non-audit services provided by the independent registered accounting
firm, the Audit Committee adopted and observes procedures that require the independent registered public accounting firm to present a budget for the three categories of non-audit services: (i) audit-related services, (ii) tax services and
(iii) other services. The budget is detailed as to the particular services to be provided so that the Committee knows what services it is being requested to pre-approve in order to facilitate a well-reasoned assessment of the impact of the
services on the auditor’s independence. After review and approval of the annual budget by the Committee, no further approval by the Committee is required to undertake specific projects within the three categories of non-audit services.

The Audit Committee has reviewed and discussed with management the Company’s audited consolidated financial
statements for the year ended December 31, 2019. The Committee has discussed with the Company’s independent registered public accounting firm, Deloitte & Touche LLP, the matters required to be discussed with the Audit Committee under
applicable Public Company Accounting Oversight Board (PCAOB) standards and SEC Rule 2-07 of Regulation S-X. The Committee also has received the written disclosure and correspondence from Deloitte & Touche LLP required by applicable
requirements of the PCAOB regarding Deloitte & Touche LLP communications with the Committee concerning independence and has discussed their independence with them. Based on the foregoing reviews and discussions, the Committee recommended to
the Board that the audited financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the SEC.

The Board of Directors asks shareholders to support a non-binding, advisory resolution approving the Company’s
executive compensation as reported in this Proxy Statement.

We design our executive compensation programs to support the Company’s long-term success. As described below in
the Compensation Discussion and Analysis section of this Proxy Statement, the Compensation and Benefits Committee has structured the Company’s executive compensation programs to achieve key Company goals and objectives. We believe our
compensation philosophy allows us to link realized pay to performance measures and reward management efforts that produce consistent, long-term performance accompanied with effective risk management and execution of the Company’s strategy.

In 2019, the Company produced record financial results and finished the year with improvements in service
reliability and productivity despite significant weather events, including harsh winter conditions in the Midwest and Pacific Northwest that were followed by widespread flooding across the central and southern portions of our network. We
continued implementation of Unified Plan 2020, the Company’s plan for operating a safe, reliable and efficient railroad by increasing reliability of our service product, reducing variability in network operations and improving resource
utilization costs. Highlights of the Company’s 2019 operational and financial performance include:

•

Record financial performance, with earnings per share of $8.38, a 6% increase when compared to 2018;

•

An all-time record operating ratio for 2019 of 60.6%, 2.1 points lower than 2018;

•

Operating income of $8.6 billion, flat with 2018 despite the 6% carload decline; and

•

Substantial improvement in key performance indicators year-over-year. For example, improvement in asset utilization and fewer car
classifications led to a 17% improvement in freight car terminal dwell and a 6% improvement in freight car velocity. We also saw a 13% improvement in locomotive productivity and 2% improvement in work force productivity

The Board urges shareholders to read the Compensation Discussion and Analysis, beginning on page 42 of this Proxy Statement, which describes in more detail how our executive compensation policies and procedures, including many best practices, operate and are designed to align compensation with our Company strategy, goals
and objectives. Shareholders should also review the Summary Compensation Table and related compensation tables and narrative, appearing on pages 58 through 74, which provide detailed information regarding the compensation of
our Named Executive Officers. The Compensation and Benefits Committee and the Board of Directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis create effective incentives for achieving Company
goals, including returns to shareholders, and that the compensation of our Named Executive Officers reported in this Proxy Statement has supported and directly contributed to the Company’s performance and success.

In accordance with Section 14A of the Securities Exchange Act of 1934, and as a matter of good corporate
governance, the Board asks shareholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the shareholders of Union Pacific Corporation (the Company) approve, on an advisory basis, the
compensation of the Company’s Named Executive Officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company’s 2020 Annual
Meeting of Shareholders.

This advisory resolution, commonly referred to as a “say on pay” resolution, is non-binding on the Board of
Directors. Although non-binding, the Board and the Compensation and Benefits Committee will review and consider the voting results when evaluating the Company’s executive compensation programs.

The Board of Directors recommends a vote FOR the advisory resolution to approve executive
compensation.

We thank you for your continued support of Union Pacific. As directors and members of the Compensation and
Benefits Committee, we take our responsibility to you very seriously. Our overarching compensation philosophy is to provide compensation opportunities that are competitive and motivating in an environment that has required continuing commitment
and resilience of our employees and the leadership team. Our compensation philosophy is also highly performance based in order to align our management team with the Company’s strategic goals and our shareholders’ long-term interests.

2019 Results and Unified Plan 2020

During 2019, the Company continued the implementation of Unified Plan 2020, the Company’s plan for operating
a safe and efficient railroad by increasing the reliability of its service product, reducing variability in network operations and improving resource utilization costs. The year 2019 also presented extreme weather challenges as harsh winter
weather, blizzard conditions and record snowfall caused weather disruptions across the Midwest and Pacific Northwest. Additionally, rainfall on top of frozen ground, covered with several inches of accumulated snow, led to rapid snowmelt and
historic, catastrophic flooding across Nebraska, Iowa, Missouri and Minnesota. Ice jams, some several miles long, contributed to extensive damage and track washouts across the Company’s network. Despite all of these challenges, the Company
delivered solid financial performance, including:

•

Earnings of $8.38 per share, representing a 6% improvement compared to 2018

•

An all-time record operating ratio of 60.6%, 2.1 points lower than 2018

•

Operating income of $8.6 billion, flat with 2018 despite a 6% carload decline

Union Pacific returned $8.4 billion to its shareholders in the form of dividends and share repurchases and
total shareholder return was 33.7% in 2019 compared with 31.5% shareholder return for the S&P 500.

Our Fiscal 2019 Compensation Program

As the Company continues to implement Unified Plan 2020, we remain focused on a compensation program that
supports the Company’s strategic goals and reflects our commitment to alignment of pay with performance. For fiscal year 2019, the Named Executive Officers’ (NEOs) formula-based incentive cash program was similar to 2018 with eighty percent
(80%) of the target annual incentive cash bonus based on two key performance metrics: operating income (40%) and operating ratio (40%). The remaining 20% of an executive’s target incentive cash bonus was based on the Committee’s evaluation of
the Company’s performance against pre-established business objectives and individual executive performance in the key areas identified in the Company’s new strategy wheel which we implemented in 2019 as set forth on page 51
of the Compensation Discussion & Analysis (CD&A).

After thorough deliberation and consideration, including discussions with the Committee’s compensation
consultant, the Committee made an adjustment for weather related expenses incurred by the Company due to the historic and extreme flooding experienced during 2019. This adjustment to the calculation of our formulaic bonus program under the
Company’s 2019 Annual Incentive Plan is detailed on page 50 of the CD&A. The Committee believes that the adjustment appropriately recognizes the significant productivity and operational improvements management and our
entire workforce achieved during 2019 through the implementation of Unified Plan 2020. This adjustment resulted in an annual incentive bonus payout for 2019 at 41% of target for Mr. Fritz and the other NEOs, excluding Mr. Vena.

As described on page 46 of the CD&A, due to Mr. Vena’s critical role in the
implementation of Unified Plan 2020, the Committee recommended, and the Board approved, an annual incentive bonus for 2019 for Mr. Vena at 150% of target. Based on Mr. Vena’s performance in leading the Company’s achievement of an historic
operating ratio of 60.6 %, the Committee also recommended, and the Board approved, vesting of the first tranche of his 2019 performance stock unit award at 100% of target, and also approved another performance-based long-term incentive grant.

Long-term equity incentives remain an integral part of our compensation program, as we believe they support
alignment of our executives’ interests with the interests of our shareholders. The 2019 equity grants for the NEOs consisted of 60% (up from 50%) performance stock units (PSUs) and stock options constituted the remaining 40% of award values,
reflecting our decision to eliminate retention stock units from our executive compensation program.

The Committee also approved a formalized policy for recoupment of incentive compensation described on page 44 which became effective January 1, 2020. This policy is meant to be consistent with, but also is more expansive than, the proposed “clawback” rules under the Dodd-Frank Wall Street and Consumer Protection Act. While such
rules have not yet been finalized, the Committee believes adoption of the policy is consistent with good corporate governance principles.

Further detail on our compensation program is included in the CD&A that follows.

Diversity and Our Workforce

We are working to assist the Company in creating a 21st-century workforce that is gender-balanced and inclusive of top, diverse talent. The Company is committed to improving and strengthening performance to further build an inclusive workforce that reflects the
diverse markets and communities it serves . A positive, inclusive and high-performing work environment is essential in order for employees to feel valued and able to fully contribute to the Company’s mission.

Ongoing Commitment to Shareholder Engagement

The Committee values the perspectives of the Company’s shareholders and the importance of shareholder
feedback, as demonstrated by the continued evolution of our compensation program. We appreciate the strong support from shareholders on our 2019 say-on-pay vote on executive compensation. As the Company moves forward with Unified Plan 2020, we
are committed to maintaining a compensation structure that aligns pay with performance, drives long-term value creation and reflects the perspectives of our shareholders.

Union Pacific Railroad Company (the Railroad) is the principal operating company of Union Pacific Corporation
(the Company). One of America’s most recognized companies, the Railroad links 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. The Railroad’s diversified business mix includes
Agricultural Products, Energy, Industrial and Premium. We serve many of the fastest-growing U.S. population centers, operate from all major West Coast and Gulf Coast ports to eastern gateways, connect with Canada’s rail systems and are the only
railroad serving all six major Mexico gateways. Our freight traffic consists of bulk, manifest and premium business. Bulk traffic primarily consists of coal, grain, soda ash, ethanol and rock shipped. Manifest traffic includes individual carload
or less than train-load business involving commodities such as lumber, steel, paper, food and chemicals. The transportation of finished vehicles, auto parts, intermodal containers and truck trailers are included as part of our premium business.
The Railroad provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner.

Our operating plan, Unified Plan 2020, implements Precision Scheduled Railroading principles, coupled with our
own best practices. It is an important part of the Company’s objective to operating a safe, reliable and efficient railroad by increasing reliability of our service product, reducing variability in network operations, and improving resource
utilization.

Safety: While
2019 was a year of significant operational change at the Company, we remained committed to the safety of our employees, our customers and the public. As we implemented Unified Plan
2020, we remained focused on identifying and managing risk and training our employees as their work environment changed.
Despite these efforts, our safety results were not good enough. Our personal injury incidents per 200,000 employee-hours increased 11% from 2018 and our reportable derailment
incident rate per million train miles increased 30%. In addition to using and expanding the deployment of Total Safety Culture and Courage to Care, we implemented COMMIT (Coaching, Observing, Mentoring and Motivating with Integrity and Trust) throughout our operations. All of these
programs allow us to identify and implement best practices for employee and operational safety.

Service and Operations: The year began with a series of significant weather events. Heavy snowfall and harsh winter conditions in the Midwest and Pacific Northwest were followed by widespread
flooding across the central and southern portions of our network. Despite the disruptions, we remained focused on the implementation
of Unified Plan 2020.

Although our operational changes were impacted by weather in the early part of 2019, our key performance
indicators improved substantially year-over-year. Improvement in asset utilization and fewer car classifications led to 17% improvement in freight car terminal dwell and 6% improvement in freight car velocity. We also saw 13% improvement in
locomotive productivity and 2% improvement in work force productivity.

Financial Results:
In 2019, the Company generated operating income of $8.6 billion, flat with 2018 despite the 6% carload decline. Lower volumes, productivity initiatives and lower fuel prices drove
operating expenses down 8% from 2018. These factors coupled with improved pricing offset the impact of the revenue decline and drove an all-time record 60.6% operating ratio, improving 2.1 points from 2018. Net income of nearly $6.0 billion translated into earnings of $8.38 per diluted share, up 6%
from last year.

Pay for Performance — We tie pay to performance by aligning a significant
portion of the executive’s opportunity for compensation to annual (short-term) and long-term Company strategy. We also integrate the Company’s critical business objectives (safety, service, and financial performance) into the Company’s
strategy and compensation programs to reflect individual performance and management effectiveness, along with other qualitative factors, which contribute to the Company’s performance.

•

Align with Shareholder Interests — We link a substantial portion of
executive compensation to both short-term and long-term financial performance that benefits our shareholders and aligns the interests of management with those of our shareholders by providing equity incentives.

•

Attract and Retain Top Talent — We are able to attract and retain key
executives critical to our long-term success by structuring compensation levels to reflect the competitive marketplace for similar positions at other comparable peer group companies.

The Compensation and Benefits Committee believes this compensation philosophy allows us to reward behavior that
produces consistent, long-term performance accompanied with effective risk management and execution of the Company’s strategy.

The Committee carefully evaluates and considers a number of factors in connection with its executive
compensation decisions, including:

✔

Company performance against objectives;

✔

Guidance from the Committee’s compensation consultant;

✔

Input from the CEO; and

✔

Appropriate peer comparisons.

Company Performance. As described above, under the Company’s annual incentive cash program, the Company measures its performance against a formulaic component based on pre-established
operating income and operating ratio targets, as well as a non-formulaic component based on the Committee’s evaluation
of certain business objectives related to safety, service and financial performance outlined on pages 49 and 50. The
Committee recommends the operating income and operating ratio targets to the Board for approval each February. Management also develops the Company’s overall strategy and the
corresponding business objectives and presents them to the Board annually in February. After Board approval, the Committee
incorporates the objectives into the compensation program with assistance and advice from the Finance Committee of the
Board. The Board monitors the Company’s progress concerning execution of its strategy and its business objectives during the year. At the end of the year, the Board assesses the
Company’s achievement of these objectives. In February, subsequent to the performance year, management presents to the
Committee the Company’s operating income and operating ratio results, its achievement compared to the business objectives, and its relative performance compared to the Peer Group.

Guidance from Compensation Consultant and Input from CEO. The Committee reviews and recommends the compensation of all NEOs to the Board for its approval. The CEO provides the Committee
with his evaluation of the performance of the other NEOs and his recommendations for their compensation. The Committee
also receives information and recommendations from its independent compensation consultant (FW Cook) on matters related to the NEOs’ (including the CEO’s) and other executives’ compensation. The Committee then determines (with advice from the Board, and assistance from its consultant) a bonus and equity
award for the Company’s CEO.

For more information on the operation of the Committee, including information on its compensation consultant,
see pages 29 and 30 of this Proxy Statement.

Peer Companies. The Committee benchmarks salary, Target Total Cash Compensation and Target Total Direct Compensation for the NEOs against competitive market information. To assess competitive market information, the Committee looks
primarily to pay data from the proxy statements of the Company’s Peer Group.

As further discussed below, the Committee generally seeks to establish base salaries below the median of the
Peer Group, reflecting the Committee’s philosophy that a greater proportion of the cash component of the executives’ compensation should be incentive-based. The Committee generally targets a range around the median of the Peer Group for Target
Total Cash Compensation and Target Total Direct Compensation. Actual Total Direct Compensation and Actual Total Cash Compensation may be greater or less than targeted percentiles, depending upon whether and to what degree the Company achieves its
business objectives (as described above).

Other factors considered in setting target compensation levels may include the individual performance of each
NEO and his or her position relative to the Company’s current internal pay structure or changes in personnel or compensation at the Peer Group companies. In addition, the Committee particularly focuses on competitive pay for railroad executives
within the Peer Group and the performance of other comparable railroads. In comparing the executive positions with comparable positions at companies within the Peer Group, the Committee and FW Cook review and consider any adjustments that may be
required to account for significant differences in tenure or functional responsibilities.

For compensation decisions made in 2019, the Company’s Peer Group consisted of the following 15 companies
listed below.

Canadian National

​

​

Canadian Pacific

​

​

CSX

Deere & Co

​

​

Delta Airlines

​

​

Exelon

FedEx

​

​

Honeywell International

​

​

NextEra Energy

Norfolk Southern

​

​

Northrop Grumman

​

​

Raytheon

Southern Co.

​

​

Southwest Airlines

​

​

UPS

The Committee selected this Peer Group with the assistance of its compensation consultant, FW Cook, after
considering U.S. based public companies in the same Global Industry Classification System (GICS) Industry Group with comparable revenues and market capitalization and other U.S.-based public companies with comparable (i) revenues, (ii) operating
income, (iii) total assets, (iv) market capitalization and (v) employees, while excluding pharmaceuticals, high-tech, insurance and financial services companies. These comparative financial measures and the number of employees for the 2018 Peer
Group are summarized below and were used for compensation decisions made in 2019.

​

​

PEER GROUP

​

​

UNION PACIFIC

​

​

MEDIAN

​

​

75TH PERCENTILE

​

​

COMPANY DATA

​

​

PERCENTILE RANK

Net Revenue

​

​

$​27,058

​

​

$​39,560

​

​

$​22,832

​

​

​39th

Operating Income

​

​

$​4,414

​

​

$​5,118

​

​

$​8,517

​

​

​100th

Total Assets

​

​

$​49,589

​

​

$​65,189

​

​

$​59,147

​

​

​68th

Market Capitalization

​

​

$53,380

​

​

$​61,332

​

​

$108,411

​

​

​98th

Employees

​

​

​58,803

​

​

​ 82,500

​

​

​ 41,992

​

​

​45th

Dollars in millions. Median/Percentiles determined by FW Cook using Standard & Poor’s Capital IQ Service,
Form 8-K filings and Peer Group company information. The financial information provided above is derived from data as of fiscal year ending December 31, 2018, except as of September 2018 for Exelon and Southern Co., October 2018 for Deere &
Co. and November 2018 for FedEx. Market Capitalization is a 12-month average as of December 31, 2018.

We endeavor to maintain strong governance standards in our policies and practices related to executive
compensation. Below is a summary of key executive compensation and governance practices in place during 2019.

​

What We Do

​

​

What We Don’t Do

​

​

✔

​

​

Emphasize Performance-Based Variable Compensation

​

​

✗

​

​

No Repricing or Back-Dating of Options Allowed

​

​

✔

​

​

Utilize a Compensation Recoupment Policy

​

​

✗

​

​

No Individual Supplemental Executive Retirement Plans

​

​

✔

​

​

Tie Compensation to Short-and-Long-Term Performance

​

​

✗

​

​

No Tax Gross-Up Payments Allowed for NEOs, including Change-in-Control

​

​

✔

​

​

Allow Only Minimal Perquisites

​

​

✗

​

​

No Employment Agreements with any of our Executive Officers, including NEOs

Effective January 1, 2020, the Company adopted its Policy for Recoupment of Incentive Compensation. This policy
allows the Board’s Compensation and Benefits Committee to require Company executives to repay to the Company certain incentive compensation (or if such incentive compensation has not been paid or settled, the Company may cancel such incentive
compensation) if the Committee determines either (a) that a financial restatement is required due to the Company’s material non-compliance with financial reporting requirements or if there was a material error in incentive compensation
calculations, or (b) if the executive engaged in certain types of detrimental conduct, as more particularly described in the policy. This policy is meant to be consistent with, but also is more expansive than, the proposed “clawback” rules under
the Dodd-Frank Wall Street and Consumer Protection Act. While such rules have not yet been finalized, the Company nevertheless implemented this recoupment policy because we believe it is consistent with good corporate governance principles.

This Compensation Discussion and Analysis describes the material elements of
our executive compensation program, and the corresponding pay decisions for our 2019 Named Executive Officers (NEOs), who are listed below. The amounts in each NEO’s pie chart below reflect the values in the Summary Compensation Table on page 58.

​

Lance M. FritzChairman, President and Chief Executive Officer

​

​

Age: 56Tenure: 20 years

​

​

Compensation Decisions for 2019

​

​

• Increased base salary
by 2.2%

• LTI target unchanged

• Annual incentive
target unchanged

• Increased Total
Target Direct
Compensation by
0.2%

​

​

​

During 2019, Mr. Fritz marked almost five years as our Chief Executive Officer. The Compensation and Benefits
Committee increased Mr. Fritz’s salary for 2019 to $1,175,000, a 2.2% increase, and maintained Mr. Fritz’s 2019 Annual Incentive Plan bonus target of $2,200,000. Mr. Fritz received an annual incentive bonus for 2019 of $902,000 at 41% of target
based on the formulaic bonus program under the Company’s 2019 Annual Incentive Plan. The Committee made no change to Mr. Fritz’s long-term incentive target grant value of approximately $9,750,000 consisting of 60% performance stock units and 40%
stock options granted on February 7, 2019. Mr. Fritz’s 2017 grant of performance stock units paid out at 200% of target.

Mr. Knight retired as our Executive Vice President and Chief Financial Officer on December 31, 2019, after
nearly 40 years of service. The Compensation and Benefits Committee increased Mr. Knight’s salary for 2019 to $619,000, a 2.5% increase, and maintained Mr. Knight’s 2019 Annual Incentive Plan bonus target of $1,275,000. Mr. Knight received an
annual incentive bonus for 2019 of $523,000 at 41% of target based on the formulaic bonus program under the Company’s 2019 Annual Incentive Plan. The Committee made no change to Mr. Knight’s long-term incentive target grant value of approximately
$3,400,000 consisting of 60% performance stock units and 40% stock options granted on February 7, 2019. Mr. Knight’s 2017 grant of performance stock units paid out at 200% of target.

To help lead implementation of our Unified Plan 2020, Mr. Vena became Chief Operating Officer effective
January 14, 2019. Mr. Vena previously served as Executive Vice President and Chief Operating Officer of Canadian National Railway Company, where he was responsible for implementing its highly successful Precision Scheduled Railroad operating
model. At time of hire, his annual base salary was $600,000 with an annual target bonus opportunity of $750,000, payout of which is dependent on the Company’s formulaic bonus program under the Company’s 2019 Annual Incentive Plan.

Mr. Vena also received a $4,000,000 equity grant award consisting of 60% performance stock units and 40% stock
options, each with a two year vesting period, prorated and payable annually based on the Company’s operating income and operating ratio. As previously disclosed, Mr. Vena’s initial performance stock unit award was subject to review for potential
adjustment after the end of the year based on performance.

At its February 2020 meeting, the Compensation and Benefits Committee reviewed the critical role and
accomplishments of Mr. Vena in the implementation of Unified Plan 2020. Based on Mr. Vena’s performance in leading the Company’s achievement of an historic operating ratio of 60.6%, the Committee recommended, and the Board approved, vesting of
the first tranche of his 2019 performance stock unit award at 100%. In addition, the Compensation and Benefits Committee recommended, and the Board approved, payment to Mr. Vena of an annual incentive bonus for 2019 of $1,125,000 at 150% of
target. The Committee will review the second tranche of Mr. Vena’s performance stock unit award for potential adjustment at the end of 2020.

Likewise, in recognition of the role and accomplishments of Mr. Vena in the implementation of Unified Plan 2020, the Compensation and Benefits Committee in
March 2020 recommended, and the Board approved, a $4,000,000 equity grant award subject to vesting over two years. The new grant consisted of 40% stock options and 60% performance stock units,
with a two year vesting period, and the number of performance stock units payable based on the Company’s 2020 operating ratio.

Ms. Ferguson has been our Executive Vice President, Chief Legal Officer and Corporate Secretary for almost
4 years. The Compensation and Benefits Committee increased Ms. Ferguson’s salary for 2019 to $485,000, a 5.0% increase, and maintained Ms. Ferguson’s 2019 Annual Incentive Plan bonus target of $750,000. Ms. Ferguson received an annual incentive
bonus for 2019 of $308,000 at 41% of target based on the formulaic bonus program under the Company’s 2019 Annual Incentive Plan. The Committee made no change to Ms. Ferguson’s long-term incentive target grant value of approximately $1,500,000
consisting of 60% performance stock units and 40% stock options granted on February 7, 2019. Ms. Ferguson’s 2017 grant of performance stock units paid out at 200% of target.

Ms. Whited has been our Executive Vice President and Chief Human Resources Officer for almost 2 years after
previously serving as the Company’s Executive Vice President and Chief Marketing Officer. The Compensation and Benefits Committee increased Ms. Whited’s salary for 2019 to $464,000, a 2.0% increase, and maintained Ms. Whited’s 2019 Annual
Incentive Plan bonus target of $750,000. Ms. Whited received an annual incentive bonus for 2019 of $308,000 at 41% of target based on the formulaic bonus program under the Company’s 2019 Annual Incentive Plan. The Committee made no change to
Ms. Whited’s long-term incentive target value of approximately $1,500,000 consisting of 60% performance stock units and 40% stock options granted on February 7, 2019. Ms. Whited’s 2017 grant of performance stock units paid out at 200% of target.

The majority of the compensation awarded to our CEO and other NEOs, is performance-based, variable compensation
and “at-risk.” This is illustrated in the charts below that show the pay mix for Mr. Fritz, our CEO, and for our other NEOs as a group based on the target total direct compensation received by these executives in fiscal 2019.

The CEO reviews base salaries and prior year performance and accomplishments for the other NEOs and recommends
a base salary for the coming year for each. The Committee considers and evaluates these base salary recommendations. Among many considerations, the Committee reviews: (i) the executive’s position and responsibility in the organization, (ii) the
executive’s experience and expertise, (iii) Company performance, (iv) individual accomplishments and job performance during the year, (v) Peer Group pay data, (vi) internal benchmarking relative to the Company’s pay structure, and (vii) current
salary. In making salary recommendations to the Board of Directors, the Committee exercises subjective judgment in evaluating many factors but applies no specific weights to any factor. The Committee, with input from its compensation consultant,
and the Board’s review of CEO performance, assesses and determines the base salary of the CEO for subsequent Board approval.

In February 2019 and 2020, the Committee reviewed each of our NEO’s base salary. Upon review of competitive
market data, including our Peer Group, the Committee approved the salary increases shown below.

NAME

​

​

2018 SALARY

​

​

INCREASE
FOR 2019

​

​

2019 SALARY

​

​

VS. PEER GROUP

​

​

INCREASE
FOR 2020

​

​

2020 SALARY

Lance M. Fritz

​

​

$1,150,000

​

​

2.2%

​

​

$1,175,000

​

​

25P-50P

​

​

2.1%

​

​

$1,200,000

Vincenzo J. Vena

​

​

(1)

​

​

—

​

​

600,000

​

​

Below 25P

​

​

3.3%

​

​

620,000

Robert M. Knight, Jr.

​

​

604,000

​

​

2.5%

​

​

619,000

​

​

25P-50P

​

​

0.0%

​

​

(2)

Rhonda S. Ferguson

​

​

462,000

​

​

5.0%

​

​

485,000

​

​

Below 25P

​

​

3.1%

​

​

500,000

Elizabeth F. Whited

​

​

455,000

​

​

2.0%

​

​

464,000

​

​

Below 25P

​

​

3.0%

​

​

478,000

(1)

Mr. Vena was elected on January 14, 2019.

(2)

Mr. Knight retired on December 31, 2019.

2019 Annual Incentive Plan

Eighty percent (80%) of the target annual incentive cash bonuses paid to executives, including the NEOs, are
based on the attainment of pre-established objective Company financial performance goals, and the remainder (20%) is based on the Company’s performance against business objectives and individual executive performance in key areas such as safety,
customer service, resource productivity, maximized franchise, innovation and employee engagement. The financial performance goals were based on operating income (40%) and operating ratio (40%), which are key performance measures in the rail
industry. If the minimum performance thresholds for both operating income and operating ratio are not achieved, then no annual incentive cash bonus is paid to executives. For performance that exceeds target levels, the annual incentive plan
payout is capped at 200% of target.

When determining individual annual incentive bonus targets for each of the NEOs, the Committee generally
targeted the 50th percentile of Target Total Cash Compensation. In light of Mr. Knight’s contributions and performance, the Committee recommended his annual
incentive bonus target be set above the 75th percentile of our Peer Group. These individual annual incentive bonus targets for each of the NEOs were approved by the
Committee and then recommended to the Board and approved.

Annual incentive compensation supports the Compensation Committee’s pay-for-performance philosophy and further
aligns individual goals with Company goals as set forth in the Company’s annual operating plan. For 2019, the Committee selected Operating Income and Operating Ratio as the key financial metrics to focus on both absolute and relative operating
performance. The tables below display the respective weightings of the relevant performance measures and the aggregate actual performance for the annual cash bonus reported for the NEOs for 2019.

2018 PERFORMANCE

​

​

OPERATING INCOME
40%

​

​

OPERATING RATIO
40%

​

​

NON-FORMULAIC
20%

Maximum – 200% Payout

​

​

$10,792

​

​

59.0%

​

​

200%

Target – 100% Payout

​

​

9,384

​

​

60.5%

​

​

100%

Threshold – 50% Payout

​

​

8,915

​

​

61.0%

​

​

50%

2019 Actual*

​

​

8,738**

​

​

60.6%**

​

​

25%

Performance Achieved – Weighted Average Payout = 41%

​

​

0%

​

​

90%

​

​

25%

*

The 2019 annual incentive plan design includes an adjustment to operating ratio for the reported fuel expense and fuel revenue from
the actual price to the price assumed in the Board approved financial plan.

**

Special transactions or events, such as weather or accounting special charges, that impact operating income by $50 million or more
in any year are subject to the Compensation and Benefit’s Committee’s approval for inclusion or exclusion in the adjusted Operating Ratio and Operating Income calculations. In 2019, the Committee made an adjustment to the 2019 Annual
Incentive Plan to exclude the effect of the extraordinary weather events. The Committee believes that the adjustment appropriately recognizes the significant productivity and operational improvements management achieved during 2019
through the implementation of Unified Plan 2020. The actual results as reported in the 2019 Annual Report on Form 10-K for the year ended December 31, 2019, for operating income was $8.6 billion, and for operating ratio was 60.6%.

​

​

​

​

ACTUAL

​

​

​

​

NAME

​

​

2019 TARGET BONUS

​

​

OPERATING
INCOME
40%

​

​

OPERATING
RATIO
40%

​

​

NON-FORMULAIC
20%

​

​

2019 TOTAL ANNUAL
INCENTIVE BONUS

​

​

2019 OVERALL PAYOUT
(AS A % OF TARGET)

Lance M. Fritz

​

​

$2,200,000

​

​

$0

​

​

792,000

​

​

110,000

​

​

$902,000

​

​

41%

Vincenzo J. Vena

​

​

750,000

​

​

—

​

​

—

​

​

—

​

​

1,125,000

​

​

150%*

Robert M. Knight, Jr.

​

​

1,275,000

​

​

0

​

​

459,000

​

​

64,000

​

​

523,000

​

​

41%

Rhonda S. Ferguson

​

​

750,000

​

​

0

​

​

270,000

​

​

38,000

​

​

308,000

​

​

41%

Elizabeth F. Whited

​

​

750,000

​

​

0

​

​

270,000

​

​

38,000

​

​

308,000

​

​

41%

*

The Compensation and Benefits Committee reviewed the critical role and accomplishments of Mr. Vena in the implementation of Unified
Plan 2020. Based on Mr. Vena’s performance in leading the Company’s achievement of an historic operating ratio of 60.6%, the Committee recommended, and the Board approved, payment to Mr. Vena of an annual incentive bonus for 2019 of
$1,125,000 at 150% of target.

In 2018, we revised our Company strategy and focused on its rollout and implementation in 2019. The six value
tracks used in our previous strategy live on in our strategy wheel, providing employees a clearer picture of the Company’s strategic intent. The individual strategic elements work together to turn the wheel, driving Union Pacific forward:

•

Safest and Most Reliable Freight Rail Products and Services. Everything we do must be done
safely, or we don’t do it – that’s our promise to each other. We also must be reliable, so customers trust we’ll deliver on our promises. Unified Plan 2020, our new operating plan, accomplishes this by creating an achievable
transportation plan customers can count on.

•

Highly Efficient Operations. Driving down cost and removing waste helps us to be more
competitive, enabling us to enter new markets. The faster we turn our assets – whether it’s a locomotive or a freight car – the more we can do with our investment.

Best-in-Industry Cash Returns. Each employee plays a role, from getting price on a contract to
finding efficiencies in everyday work. This gives shareholders confidence in our ability to create financial returns, allowing us to invest in and grow our business.

•

Optimal Investment. Every dollar spent must drive safe, reliable and efficient results. We
invest in areas customers are willing to pay for, whether it’s improving car cycle time, updating track infrastructure on vital corridors or developing digital tools that help them plan their business.

•

Proud and Engaged Workforce. The wheel turns when our employees work toward the same goals. It
takes the best employees in the industry to become the best freight railroad in North America – we have that, and there is nothing stopping us from achieving our vision.

As we transform our railroad into the safest, most reliable and most efficient in North America, our values
will continue guiding us: Our passion for performance will help us win; our high ethical standards will ensure we don’t win at the expense of any one stakeholder;
and teamwork will make sure we win together.

Based on the Committee’s evaluation of the Company’s achievement of its business objectives and individual
executive performance in the key areas identified in our strategy wheel above, the Committee exercised its discretion to award this component at 25% of target for the Named Executive Officers, excluding Mr. Vena. Among other factors, the
Committee also considered the Company’s financial performance as compared to the Company’s peer group measured by growth in total revenue, operating income, diluted earnings per share from continuing operations (EPS) and ROIC. In addition, the
Committee compared the Company’s total shareholder return with those of the Peer Group.

Long-Term Equity Incentive Compensation

The components of long-term incentive compensation are:

​

​

Performance Stock UnitsPerformance stock units are payable based on the attainment and certification of average annual ROIC for a three-year period and
a relative operating Income Growth Modifier (+/- 25% of the award earned based on the ROIC achieved) compared to the S&P 500 Industrials Index.

​

​

​

​

Stock OptionsStock option awards become fully exercisable only if the executive remains an employee through a three-year vesting period.
One-third of each stock option grant vests each year over the three-year vesting period.

The Committee generally seeks to award long-term incentives with grant date fair values that range between 50%
and 75% of each NEO’s Target Total Direct Compensation making it the largest element of their Total Direct Compensation. In setting the size of long-term incentive awards, the Committee considers the individual performance of the NEO as well as
the Target Total Direct Compensation opportunities of similarly situated executives of the Company’s Peer Group. The CEO recommends to the Committee an aggregate value of long-term incentive awards for each of the NEOs (other than himself, a
determination reserved for the Committee, taking into account advice from its compensation consultant and the Board’s evaluation of the CEO). The Committee considers these recommendations and determines the final amounts awarded to each NEO. The
Committee may vary the mix of each component of equity compensation to some degree depending on Company and individual performance and retention risk regarding an executive.

The long-term incentive awards granted by the Committee in February 2019 reflected the Committee’s desire to
provide long-term incentive compensation to ensure the continued efforts of the NEOs to meet the long-term goals and strategic plans of the Company and to align this element of their compensation with the long-term interests of the Company’s
shareholders. The majority of our long-term incentive compensation is performance-based. The annual long-term incentive program grants for the NEOs in 2019 included the following targeted mix of equity compensation based on grant date fair value:
60% performance stock units and 40% stock options. The long-term incentive awards for the NEOs and a description of the terms of these awards are set forth on pages 60 and 61 in the Grants of
Plan-Based Awards in Fiscal Year 2019 Table and accompanying narrative discussion.

Performance Stock Units

In February 2019, the Committee awarded the NEOs, other than Mr. Vena, performance stock units (PSUs) that are
payable based on the attainment and certification of average annual ROIC, as adjusted, for a three-year period (Performance Period) and a relative Operating Income Growth (OIG) modifier compared to the S&P 500 Industrials Index, which can
increase or decrease payment by up to 25% of the stock units earned under the ROIC performance criteria. Payout of the 2019 performance stock units will continue to be capped at 200% of the target number of stock units. The threshold, target and
maximum number of performance stock units that may be earned by each NEO is set forth on page 60 in the Grants of Plan-Based Awards in Fiscal Year 2019 Table.

We define ROIC as net operating profit after taxes, divided by average invested capital. The Committee may
adjust ROIC to reflect the effect of special or strategic transactions or events, such as excluding the impact of significant gains on sales of real estate, tax adjustments, accounting charges, or reclassifications. The Committee selected ROIC
because it is one of our key measurements that indicates success in making long-term capital investment decisions that improve financial and operational performance and increase shareholder value. In addition, the Board emphasizes ROIC as a key
focus area for the Company.

The ROIC performance criteria are set with rigorous analysis of current and projected business levels and
changes in the economic environment that may impact the Company’s ability to achieve levels of return reported in previous periods.

PERFORMANCE PERIOD

​

​

ROIC
THRESHOLD

​

​

ROIC
TARGET

​

​

ROIC
MAXIMUM

2017 – 2019

​

​

11.0%

​

​

12.5%

​

​

14.0%

2018 – 2020

​

​

13.8%

​

​

14.8%

​

​

15.8%

2019 – 2021

​

​

15.1%

​

​

16.8%

​

​

18.1%

The performance stock units granted in 2017, 2018 and 2019 generally vest three years from the date of grant
subject to the achievement of the ROIC performance criteria.

Upon completion of year three of the Performance Period, the executive may earn up to two times the target
number of performance stock units granted to that executive based on the average annual ROIC performance achieved over all three years of the program. In addition, the actual number of stock units earned at the end of the Performance Period will
be adjusted up or down by a percentage not to exceed 25% (subject to a maximum of two times the target number of stock units granted) based on the Company’s Operating Income Growth (OIG) over the Performance Period as compared to the OIG of the
companies in S&P 500 Industrials Index.

If the Company does not meet the threshold ROIC level for the three-year performance period, executives will
not earn any performance stock units. The Company does not pay dividend equivalents on unearned performance stock units.

With respect to performance stock units granted in 2017, executives could earn up to one-third of the target
number of performance stock units granted to him or her based on each of the first two years of ROIC performance achieved, and dividend equivalents were paid on the earned performance stock units. As described above, this annual vesting feature
and the associated dividend equivalents were removed for the performance stock units granted in 2018 and 2019.

The Committee has certified the ROIC results as shown in the graph below for performance years 2010-2019.

*

See item 7 of Union Pacific’s Annual Report on Form 10-K for the year ended December 31, 2019, for reconciliations to U.S. GAAP. For
2017, the Committee’s ROIC certification included adjustments for the impact of the Company’s workforce reduction program. For 2017-2019, the Committee’s ROIC certification included adjustments for the benefits of the Tax Act.

In February 2020, the PSUs granted for the 2017-19 performance period were settled at an overall payout of 200%
of target, based on performance over the three-year performance period against pre-established goals for ROIC. Our relative OIG was in the 58th percentile so the
modifier had no effect on the final payout.

Performance stock units earned under the 2017 grants for each of the NEOs are included as Earned Performance
Stock Units in the Stock Awards column of the Outstanding Equity Awards at 2019 Fiscal Year-End Table on page 62.

The table below summarizes how the performance stock units granted in 2017 were earned, and how the performance
stock units granted in 2018 and 2019 are tracking as of the end of 2019.

PERFORMANCE PERIOD

​

​

AVERAGE
ROIC

​

​

PERCENT OF TARGET
ACHIEVED TO DATE

​

​

PERCENT OF TARGET EARNED

2017 – 2019

​

​

14.1%

​

​

200%

​

​

200% of the target number of stock units

2018 – 2020

​

​

15.1%

​

​

135%

​

​

No stock units earned until the end of the performance period

2019 – 2021

​

​

15.0%

​

​

​0%

​

​

No stock units earned until the end of the performance period

The table below shows the application of the OIG modifier based on the Company’s Operating Income Growth
percentile.

OPERATING INCOME
GROWTH (PERCENTILE)

​

​

MODIFIER
(% OF EARNED SHARES)

0% - 10%

​

​

-25%

11% - 20%

​

​

-20%

21% - 30%

​

​

-15%

31% - 40%

​

​

-10%

41% - 60%

​

​

No Effect

61% - 70%

​

​

+10%

71% - 80%

​

​

+15%

81% - 90%

​

​

+20%

91% - 100%

​

​

+25%

Mr. Vena’s long-term equity incentive compensation is described on page 46 of this
Compensation Discussion and Analysis.

In February 2020, the Compensation and Benefits Committee reviewed and approved the following compensation
changes for the NEOs and the Board of Directors reviewed and approved Mr. Fritz’s compensation.

The following table summarizes adjustments made to CEO and other NEO compensation for 2020.

NAME

​

​

Annual Base Salary Increase %

​

​

Target Annual Incentive

​

​

Target Long-Term Incentive

Lance M. Fritz

​

​

2.1%

​

​

No change

​

​

+$750,000

Vincenzo J. Vena (1)

​

​

3.3%

​

​

+$100,000

​

​

​+$4,000,000

Robert M. Knight, Jr. (2)

​

​

0.0%

​

​

​N/A

​

​

​N/A

Rhonda S. Ferguson

​

​

3.1%

​

​

No change

​

​

No change

Elizabeth F. Whited

​

​

3.0%

​

​

No change

​

​

No change

(1)

On March 19, 2020, the Compensation and Benefits Committee recommended, and the Board approved, a $4,000,000 grant subject to
vesting over two years, consisting of 40% stock options and 60% performance stock units.

(2)

Mr. Knight retired on December 31, 2019.

Other Compensation

Perquisites

The Committee reviews perquisites periodically for both appropriateness and effectiveness. Key executives,
including the NEOs, receive tax and financial counseling services and personal excess liability coverage. In 2016, the Committee eliminated the requirement for the CEO to use Company aircraft for all air travel and set a limitation for personal
flights at $90,000 for the CEO and $45,000 for the other NEOs. Executives will pay for any personal flights beyond these limits. Income is imputed to the CEO and NEOs for personal travel below the limits and tax gross-ups are not provided. All
use of Company aircraft must be approved in advance by the CEO or a specifically authorized designate.

The value of perquisites provided to the NEOs by the Company is not a significant portion of any of the NEOs’
compensation on an annual basis. Due to the relatively low cost to the Company of these perquisites, combined with the policy regarding use of Company aircraft, the Committee does not consider perquisites in its analyses of Total Direct
Compensation for the CEO and the other NEOs.

Deferred Compensation

The Committee, pursuant to its charter, is responsible for oversight of our deferred compensation arrangements.
Management and the Committee believe that deferred compensation arrangements are important benefits that contribute to the Company’s competitive compensation arrangements and help attract and retain executives. The Company’s deferred compensation
programs allow for elective deferrals of (i) salary, (ii) bonus (iii) performance stock units, and (iv) retention stock units, which accrue earnings during the deferral period as described on page 68. These deferrals are not
funded and there are no mechanisms in place (such as insurance or trusts) to protect the executives from any inability of the Company to pay these amounts in the future. More detailed descriptions of the features of our non-qualified deferred
compensation plans begin on page 68. In addition to these non-qualified deferred compensation benefits, the Company allows its executives to participate in its tax qualified 401(k) plan on terms and conditions similar to the
Company’s other employees.

Pension Plan and Supplemental Pension Plan

The Company sponsors a tax-qualified defined benefit Pension Plan and a non-qualified excess Supplemental
Pension Plan. Management and the Committee believe that the defined benefit Pension Plan and the Supplemental Pension Plan (with respect to our executives, including the NEOs) provide employees with a competitive retirement benefit. The Company
offers the Supplemental Pension Plan to allow executives to receive pension benefits for compensation and benefits that exceed government imposed limits applicable to

defined benefit plans and to allow for the inclusion of compensation that has been deferred, which cannot
be included as compensation under the defined benefit Pension Plan. Benefit amounts are based on the employee’s years of service, salary, bonus and age. More detailed descriptions of the Pension Plan and Supplemental Pension Plan are set forth on
pages 65 and 66.

Other Policies and Considerations

Change-in-Control Arrangements

The NEOs do not have individual severance agreements or employment agreements with the Company. In November
2000, the Board adopted the Union Pacific Corporation Key Employee Continuity Plan (the Continuity Plan). The purpose of the Continuity Plan is to assure the smooth transition of management and effective operation of the Company in the event of a
change-in-control by providing (i) sufficient economic security to allow key executives to focus on overall shareholder value without concern about personal financial interests and (ii) severance benefits in the event their employment with the
Company is terminated within two years following a change-in-control.

The Continuity Plan provides severance benefits to certain senior level executives, including the NEOs, in the
event (i) a change-in-control occurs and (ii) the covered executive is involuntarily terminated or constructively discharged within two years following the change-in-control. This two-step requirement will allow the new controlling party to
retain certain executives and terminate others with the obligation to provide the benefits set forth in the Continuity Plan. Severance benefits are the same for all covered executives, except for the multiple used to determine an executive’s
lump-sum severance payment. The lump-sum severance payment is equal to three times the sum of base salary plus the average of the annual bonus payments earned in the three most recent calendar years for Mr. Fritz, two times this sum for each of
Mr. Vena, Mr. Knight, Ms. Ferguson and Ms. Whited. Mr. Knight is no longer subject to severance benefits after December 31, 2019 due to his retirement. The Committee determined these multiples based upon competitive practices at the time the plan
was adopted. At its February 2014 meeting, the Committee recommended, and the Board approved, an amendment of the Continuity Plan to remove the excise tax gross-up. As a result, none of the Company’s executives, including the NEOs, are eligible
to receive any excise tax gross-up on any severance payment received under the Continuity Plan.

In September 2003, the Board adopted the Union Pacific Corporation Policy Regarding Shareholder Approval of
Future Severance Agreements (Severance Policy). Under this Severance Policy, the Company agreed not to enter into a future severance agreement with a senior executive that provides for benefits in an amount generally exceeding 2.99 times salary
plus bonus unless such agreement is approved by a vote of our shareholders.

Payments and certain severance benefits for the NEOs upon a change-in-control, as well as a description of the
Continuity Plan are set forth on pages 70 through 74.

Deductibility of Grandfathered Compensation

Due to the amendment to Section 162(m) of the Code noted above, compensation paid to covered employees in
excess of $1 million will not be deductible unless it qualifies for transition relief available for certain arrangements in place on November 2, 2017 (“Grandfathered Compensation”).

For Grandfathered Compensation intended to satisfy the requirements of Section 162(m) of the Code for
performance based compensation, the Committee has, where it deemed appropriate, taken steps intended to preserve the deductibility of said compensation to the CEO and certain executive officers. However, because there are uncertainties as to the
application and interpretation of Section 162(m) of the Code and the transition relief described above, it is possible that the Company’s deductions may be challenged or disallowed. Accordingly, there is no certainty that elements of any
Grandfathered Compensation discussed in this Proxy Statement will in fact be deductible by the Company.

The Committee reviewed and discussed with management the CD&A and, based on that review and discussion, the
Committee recommended to the Board of Directors that the CD&A be included in the Company’s 2020 Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2019.